On the Aggregate Implications of Removing Barriers to Formality
ABSTRACT: This article examines the aggregate implications of several policies aimed at removing barriers to formality. To this end, we build a dynamic equilibrium model in which heterogeneous agents choose to work for a wage or operate a technology in the formal or informal sector, based on the cos...
- Autores:
-
Granda Carvajal, Catalina
Hamann, Franz
- Tipo de recurso:
- Article of investigation
- Fecha de publicación:
- 2020
- Institución:
- Universidad de Antioquia
- Repositorio:
- Repositorio UdeA
- Idioma:
- eng
- OAI Identifier:
- oai:bibliotecadigital.udea.edu.co:10495/14448
- Acceso en línea:
- http://hdl.handle.net/10495/14448
- Palabra clave:
- Economía informal
Informal sector (Economics)
Impuestos
Taxes
Política laboral
Labour policy
- Rights
- openAccess
- License
- Atribución-NoComercial-SinDerivadas 2.5 Colombia (CC BY-NC-ND 2.5 CO)
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dc.title.spa.fl_str_mv |
On the Aggregate Implications of Removing Barriers to Formality |
title |
On the Aggregate Implications of Removing Barriers to Formality |
spellingShingle |
On the Aggregate Implications of Removing Barriers to Formality Economía informal Informal sector (Economics) Impuestos Taxes Política laboral Labour policy |
title_short |
On the Aggregate Implications of Removing Barriers to Formality |
title_full |
On the Aggregate Implications of Removing Barriers to Formality |
title_fullStr |
On the Aggregate Implications of Removing Barriers to Formality |
title_full_unstemmed |
On the Aggregate Implications of Removing Barriers to Formality |
title_sort |
On the Aggregate Implications of Removing Barriers to Formality |
dc.creator.fl_str_mv |
Granda Carvajal, Catalina Hamann, Franz |
dc.contributor.author.none.fl_str_mv |
Granda Carvajal, Catalina Hamann, Franz |
dc.subject.lemb.none.fl_str_mv |
Economía informal Informal sector (Economics) |
topic |
Economía informal Informal sector (Economics) Impuestos Taxes Política laboral Labour policy |
dc.subject.ocde.none.fl_str_mv |
Impuestos Taxes Política laboral Labour policy |
description |
ABSTRACT: This article examines the aggregate implications of several policies aimed at removing barriers to formality. To this end, we build a dynamic equilibrium model in which heterogeneous agents choose to work for a wage or operate a technology in the formal or informal sector, based on the costs and benefits associated with these occupational choices. Formality entails compliance with taxes, a minimum wage scheme, and firm operation costs but has a productivity advantage stemming from access to external finance and legal enforcement mechanisms. Informal activities avoid taxes and regulations without detection or punishment. The simulation results suggest that eliminating formal operation fees leads to firm formalization, earnings redistribution, and increases in total factor productivity and welfare. In addition, eliminating the income tax reduces labor informality. These two policies, taken together, generate full formalization and gains in redistribution, efficiency, and welfare that are even greater than when all the barriers to formality are jointly removed. In contrast, eliminating the minimum wage has strong adverse effects on labor formalization and little impact on productivity. Elimi¬nating the payroll tax leaves the occupational composition nearly unchanged and productivity and welfare as well. |
publishDate |
2020 |
dc.date.accessioned.none.fl_str_mv |
2020-05-19T18:10:40Z |
dc.date.available.none.fl_str_mv |
2020-05-19T18:10:40Z |
dc.date.issued.none.fl_str_mv |
2020 |
dc.type.spa.fl_str_mv |
info:eu-repo/semantics/article |
dc.type.coarversion.fl_str_mv |
http://purl.org/coar/version/c_970fb48d4fbd8a85 |
dc.type.hasversion.spa.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.coar.spa.fl_str_mv |
http://purl.org/coar/resource_type/c_2df8fbb1 |
dc.type.redcol.spa.fl_str_mv |
https://purl.org/redcol/resource_type/ART |
dc.type.local.spa.fl_str_mv |
Artículo de investigación |
format |
http://purl.org/coar/resource_type/c_2df8fbb1 |
status_str |
publishedVersion |
dc.identifier.uri.none.fl_str_mv |
http://hdl.handle.net/10495/14448 |
dc.identifier.doi.none.fl_str_mv |
doi.org/10.20955/r.102.203-20 |
url |
http://hdl.handle.net/10495/14448 |
identifier_str_mv |
doi.org/10.20955/r.102.203-20 |
dc.language.iso.spa.fl_str_mv |
eng |
language |
eng |
dc.rights.*.fl_str_mv |
Atribución-NoComercial-SinDerivadas 2.5 Colombia (CC BY-NC-ND 2.5 CO) |
dc.rights.spa.fl_str_mv |
info:eu-repo/semantics/openAccess |
dc.rights.uri.*.fl_str_mv |
http://creativecommons.org/licenses/by-nc-nd/2.5/co/ |
dc.rights.accessrights.spa.fl_str_mv |
http://purl.org/coar/access_right/c_abf2 |
dc.rights.creativecommons.spa.fl_str_mv |
https://creativecommons.org/licenses/by-nc-nd/4.0/ |
rights_invalid_str_mv |
Atribución-NoComercial-SinDerivadas 2.5 Colombia (CC BY-NC-ND 2.5 CO) http://creativecommons.org/licenses/by-nc-nd/2.5/co/ http://purl.org/coar/access_right/c_abf2 https://creativecommons.org/licenses/by-nc-nd/4.0/ |
eu_rights_str_mv |
openAccess |
dc.format.mimetype.spa.fl_str_mv |
application/pdf |
dc.publisher.spa.fl_str_mv |
Federal Reserve Bank of St. Louis |
dc.publisher.place.spa.fl_str_mv |
Estados Unidos |
institution |
Universidad de Antioquia |
bitstream.url.fl_str_mv |
http://bibliotecadigital.udea.edu.co/bitstream/10495/14448/3/license.txt http://bibliotecadigital.udea.edu.co/bitstream/10495/14448/2/license_rdf http://bibliotecadigital.udea.edu.co/bitstream/10495/14448/1/GrandaCarvajalCatalina_2020-AggregateImplicationsRemoving.pdf |
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MD5 MD5 MD5 |
repository.name.fl_str_mv |
Repositorio Institucional Universidad de Antioquia |
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andres.perez@udea.edu.co |
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1812173084862447616 |
spelling |
Granda Carvajal, CatalinaHamann, Franz2020-05-19T18:10:40Z2020-05-19T18:10:40Z2020http://hdl.handle.net/10495/14448doi.org/10.20955/r.102.203-20ABSTRACT: This article examines the aggregate implications of several policies aimed at removing barriers to formality. To this end, we build a dynamic equilibrium model in which heterogeneous agents choose to work for a wage or operate a technology in the formal or informal sector, based on the costs and benefits associated with these occupational choices. Formality entails compliance with taxes, a minimum wage scheme, and firm operation costs but has a productivity advantage stemming from access to external finance and legal enforcement mechanisms. Informal activities avoid taxes and regulations without detection or punishment. The simulation results suggest that eliminating formal operation fees leads to firm formalization, earnings redistribution, and increases in total factor productivity and welfare. In addition, eliminating the income tax reduces labor informality. These two policies, taken together, generate full formalization and gains in redistribution, efficiency, and welfare that are even greater than when all the barriers to formality are jointly removed. In contrast, eliminating the minimum wage has strong adverse effects on labor formalization and little impact on productivity. Elimi¬nating the payroll tax leaves the occupational composition nearly unchanged and productivity and welfare as well.application/pdfengFederal Reserve Bank of St. LouisEstados Unidosinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articlehttp://purl.org/coar/resource_type/c_2df8fbb1https://purl.org/redcol/resource_type/ARTArtículo de investigaciónhttp://purl.org/coar/version/c_970fb48d4fbd8a85Atribución-NoComercial-SinDerivadas 2.5 Colombia (CC BY-NC-ND 2.5 CO)info:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by-nc-nd/2.5/co/http://purl.org/coar/access_right/c_abf2https://creativecommons.org/licenses/by-nc-nd/4.0/On the Aggregate Implications of Removing Barriers to FormalityEconomía informalInformal sector (Economics)ImpuestosTaxesPolítica laboralLabour policyFederal Reserve Bank of St. Louis ReviewLICENSElicense.txtlicense.txttext/plain; charset=utf-81748http://bibliotecadigital.udea.edu.co/bitstream/10495/14448/3/license.txt8a4605be74aa9ea9d79846c1fba20a33MD53CC-LICENSElicense_rdflicense_rdfapplication/rdf+xml; charset=utf-8823http://bibliotecadigital.udea.edu.co/bitstream/10495/14448/2/license_rdfb88b088d9957e670ce3b3fbe2eedbc13MD52ORIGINALGrandaCarvajalCatalina_2020-AggregateImplicationsRemoving.pdfGrandaCarvajalCatalina_2020-AggregateImplicationsRemoving.pdfArtículo de investigaciónapplication/pdf374774http://bibliotecadigital.udea.edu.co/bitstream/10495/14448/1/GrandaCarvajalCatalina_2020-AggregateImplicationsRemoving.pdf0dc243097459230d5720855b70b8d3d3MD5110495/14448oai:bibliotecadigital.udea.edu.co:10495/144482021-06-03 21:31:01.692Repositorio Institucional Universidad de Antioquiaandres.perez@udea.edu.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 |