Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Informal Sector

  • Ozan HatipogluEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_251


I review and discuss definitions of informal sector introduced by social scientists over the last half century. I describe how informal institutions, informal markets, and their participants’ activities form together the informal sector. I provide insight into the difficulties in defining informal sector from a judicial point of view. I discuss causes and consequences as well as economic costs and benefits of the informal sector. Finally, I provide a brief analysis of the existing econometrics methods in measuring its size.

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Further Reading

  1. Discussions on further aspects of the informal sector can be found in the following publications:Google Scholar
  2. Bajada C, Schneider F (2005) Size, causes and consequences of the underground economy: an international perspective. Ashgate Publishing Company, AldershotGoogle Scholar
  3. Chaudhuri S (2010) Revisiting the informal sector: a general equilibrium approach. Springer, New York/LondonCrossRefGoogle Scholar
  4. Thomas JJ (1992) Informal economic activity, LSE, handbooks in economics. Harvester Wheatsheaf, LondonGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of EconomicsBogazici UniversityIstanbulTurkey