Formal-informal economy linkages

Show simple item record 2008-06-03 en 2023-01-07T13:01:12Z 2023-01-07T13:01:12Z 2015-08-25 en
dc.description Commissioned by the Department of Trade and Industry and the Department of Science and Technology, March en
dc.description.abstract The persistence of high levels of unemployment, poverty and inequality are widely recognised as major socio-economic challenges for South Africa. The informal economy is often seen as an important component in expanding economic participation. However, the conceptualisation of what this practically means is not always played out. The expansion of the informal economy can have a positive effect on poverty if it arises as an off-shoot of a rapidly growing formal sector. It can reflect worsening poverty where it is stimulated by a collapsing formal economy or alternatively is caused by firms seeking to evade the regulatory and tax net. In SA, the formal economy dominates, and both output and employment are growing more rapidly than in the informal economy. In this situation, the informal economy does not appear to be dragging incomes down. But will informal economic activity be stimulated or crowded-out by a rapidly expanding formal economy? If the formal economy continues to expand, might informal activity grow at a faster, similar or slower pace? Might informal activity even shrink as the formal economy expands? There is no deterministic answer to this question. A number of variables will affect the respective growth of formal and informal activity. This paper offers a suite of linkages between formal and informal economic activity that need to be better appreciated. In reality, there is much inter-twining of informal and formal activity and this needs to be understood. Moreover, the concept of informality is not so clear:what is the informal sector? Many researchers say you know it when you see it, but it can?t be defined. This is not adequate. en
dc.format.medium Intranet en
dc.subject FORMAL ECONOMY en
dc.subject INFORMAL ECONOMY en
dc.title Formal-informal economy linkages en
dc.type Research report-client en
dc.BudgetYear 2007/08 en
dc.ResearchGroup Employment, Growth and Development Initiative en
dc.ArchiveNumber 5263 en
dc.URL en
dc.outputnumber 3807 en
dc.bibliographictitle Altman, M. (2008) Formal-informal economy linkages. (Commissioned by the Department of Trade and Industry and the Department of Science and Technology, March). en
dc.publicationyear 2008 en
dc.contributor.author1 Altman, M. en

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