Replication data for: Firms, Informality, and Development: Theory and Evidence from Brazil

Name	File Type	Size	Last Modified
Replication-Package			10/12/2019 03:29:AM

Project Description

Summary: This paper develops and estimates an equilibrium model where heterogeneous firms can exploit two margins of informality: (i) not register their business, the extensive margin; and (ii) hire workers "off the books," the intensive margin. The model encompasses the main competing frameworks for understanding informality and provides a natural setting to infer their empirical relevance. The counterfactual analysis shows that once the intensive margin is accounted for, firm and labor informality need not move in the same direction as a result of policy changes. Lower informality can be, but is not necessarily associated with higher output, TFP, or welfare.

Scope of Project

JEL Classification:
      D22 Firm Behavior: Empirical Analysis
      E26 Informal Economy; Underground Economy
      H26 Tax Evasion and Avoidance
      J46 Informal Labor Markets
      O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
      O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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Published Versions

V1 [2019-10-12]

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