20
Thu, Sep

Pathways to formalization going beyond the formality dichotomy -- the case of Peru

Finance & Investment
Typography
Abstract

Too often, academics and policy makers interpret formality as a binary choice and formalization as an irreversible process. Yet, formalization has many facets and shades on the business and labor fronts, and firms may not be able or willing to formalize... See More + Too often, academics and policy makers interpret formality as a binary choice and formalization as an irreversible process. Yet, formalization has many facets and shades on the business and labor fronts, and firms may not be able or willing to formalize all at once. This paper explores the joint process of business and labor formalization, using a unique panel data set of Peruvian micro enterprises. The paper finds that business formality does not imply labor formality, and vice versa. Further, there is significant churning in and out of different dimensions of formality within a relatively short period. Using an instrumental variable approach, the paper infers that business formalization affects labor formalization but not the other way around, and that enforcement is a key driver of formalization. Overall, the analysis shows that formalization is a gradual and reversible process, with small entrepreneurs weighing their possibilities in each pathway to business (often) or labor (less often) formalization, but rarely both at the same time.  See Less -

Advertisement

Advertisement

Translator

Advertisement
Advertisement

SolarQuarter Tweets

Follow Us For Latest Tweets

SolarQuarter 100 CXOs Confirmed To Attend Solar CEOs Meet & RE Sundowner 2018_17 Sep 2018, New Delhi, Radisson Blu Plaza, Aeroci… https://t.co/NmytYpREMp
Friday, 14 September 2018 08:09
SolarQuarter EV Investment & Finance Summit Is Here_Book Your Seats Today_1 Nov 2018, Mumbai - https://t.co/4I4pOy8M5j
Wednesday, 12 September 2018 05:07
SolarQuarter Hey << Test First Name >>, Here's Your Event Photo Gallery, Checkout The Amazing Moments - https://t.co/qE0yhHY7w0
Wednesday, 05 September 2018 13:08

Advertisement