The impact of institutions and policy on informal economy in developing countries : an econometric exploration

This paper shows empirical tests for the determinants of informal economy separately in terms of (i) income generation in the informal economy in proportion to the GDP and (ii) the proportion of employment in the informal economy to the total non-agricultural employment. Drawing on previous findings and their policy implications, the paper attempts to estimate statistically more encompassing and robust models to assess how a mix of policies and institutions impact informal economy.