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Encyclopedia of Law and Economics pp 1130–1139Cite as

Informal Sector

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Abstract

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

  • Discussions on further aspects of the informal sector can be found in the following publications:

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  • Bajada C, Schneider F (2005) Size, causes and consequences of the underground economy: an international perspective. Ashgate Publishing Company, Aldershot

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  • Chaudhuri S (2010) Revisiting the informal sector: a general equilibrium approach. Springer, New York/London

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Author information

Authors and Affiliations

  1. Department of Economics, Bogazici University, Istanbul, Turkey

    Ozan Hatipoglu

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  1. Ozan Hatipoglu
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Correspondence to Ozan Hatipoglu .

Editor information

Editors and Affiliations

  1. MRE and University of Montpellier, Montpellier, France

    Alain Marciano

  2. Faculté d’Economie, Université de Montpellier and LAMETA-UMR CNRS, Montpellier, France

    Alain Marciano

  3. DiGSPES, University of Eastern Piedmont, Alessandria, Italy

    Giovanni Battista Ramello

  4. IEL, Torino, Italy

    Giovanni Battista Ramello

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Hatipoglu, O. (2019). Informal Sector. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_251

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