Fiscal Policy with an Informal Sector

Dellas, Harris; Malliaropulos, Dimitrios; Papageorgiou, Dimitris; Vourvachaki, Evangelia

doi:10.2139/ssrn.4196588

Cited by 15 publications

(6 citation statements)

References 5 publications

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“…Moreover, this pick-up brought relatively few funds and the fiscal multipliers are going to be smaller in any case (Karagyozova-Markova, Deyanov, and Iliev 2013, 30). Fiscal policy's ineffectiveness is partly due to the high degree of informality, which determines difficulties in tax collection (Rosser, Rosser, and Ahmed 2000, 160) as well as revenue mobilisation (Dellas et al 2017). However, the crisis induced by anti-contagion measures is almost certain to cause significant tax revenue losses.…”

Section: Background Of the Studymentioning

confidence: 99%

Forecasting Pandemic Tax Revenues in a Small, Open Economy: The Case of Bulgaria

Telarico

2020

Novi Ekonomist

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Tax analysis and forecasting of revenues are of paramount importance to ensure fiscal policy’s viability and sustainability. However, the measures taken to contain the spread of the recent pandemic pose an unprecedented challenge to established models and approaches. This paper proposes a model to forecast tax revenues in Bulgaria for the fiscal years 2020–2022 built in accordance with the International Monetary Fund's recommendations on a dataset covering the period between 1995 and 2019. The study further discusses the actual trustworthiness of official Bulgarian forecasts, contrasting those figures with the model previously estimated. This study's quantitative results both confirm the pandemic's assumed negative impact on tax revenues and prove that econometrics can be tweaked to produce consistent revenue forecasts even in the relatively-unexplored case of Bulgaria offering new insights to policymakers and advocates.

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Section: Background Of the Studymentioning

confidence: 99%

Forecasting Pandemic Tax Revenues in a Small, Open Economy: The Case of Bulgaria

Telarico

2020

Novi Ekonomist

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“…The superior quality of human resources resulting from education serves as a promising asset when entering the workforce (Bento et al, 2018;BPS Provinsi D.I. Yogyakarta, 2022a;Dellas et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

Overview of Informal Sector Workers Viewed from Education Variables

Satriawan

2023

JISDeP

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The Special Region of Yogyakarta has a significant population engaged in the informal sector. This study aims to explore the relationship between educational level and participation in the informal sector. The data used in this study is from the August 2022 Sakernas (National Labor Force Survey) data. Descriptive analysis was employed to address the research objectives. The research findings reveal that over half of the population is employed in the informal sector. Workers with higher levels of education tend to transition to the formal sector, while less educated individuals dominate the informal sector. Education not only influences sectoral choices but also has an impact on conditions within the informal sector. Workers with higher education experience better conditions, regardless of the field of business, working hours, or income level. They engage in businesses that require capital, demonstrating organization, efficiency, and higher earnings. Some educated informal workers take part-time jobs while waiting for other opportunities.

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“…There is also a vast literature examining the fiscal policy implications of the shadow economy. For example, Dellas et al (2017) provide a model of fiscal policy under the presence of shadow economy in Greece and show that it has been a crucial determinant in Greece's inability for debt consolidation. Moreover, in other papers that investigate the fiscal policy-shadow economy nexus, Teobaldelli (2011) emphasizes the role of federalism, Charlot et al (2015) provide a role for regulation, and finally, Huynh and Tran (2021) look at the effect of corruption in shaping this nexus.…”

Section: Introductionmentioning

confidence: 99%

Fiscal stimulus packages to COVID‐19: The role of informality

Elgin

Williams

Oz‐Yalaman

et al. 2022

J of Intl Development

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In this paper, we use a novel cross‐country dataset to investigate the relationship between the prevalence of the shadow economy and fiscal policy responses to the economic crisis induced by the pandemic. The finding is that countries with a relatively larger shadow economy before the pandemic have adopted a smaller fiscal policy package. The results are robust to different econometric specifications, including an instrumental variable estimation. This reinforces the wider literature that countries (especially those with larger shadow economies) generally follow a procyclical policy as opposed to the optimal and countercyclical one.

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Fiscal Policy with an Informal Sector

Cited by 15 publications

References 5 publications

Forecasting Pandemic Tax Revenues in a Small, Open Economy: The Case of Bulgaria

Forecasting Pandemic Tax Revenues in a Small, Open Economy: The Case of Bulgaria

Overview of Informal Sector Workers Viewed from Education Variables

Fiscal stimulus packages to COVID‐19: The role of informality

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