Informality, Inequality and Profit Rate

Using two novel datasets of the size of the informal economy and income inequality, this study examines the effect of informality on income and wage inequality with special attention to the rates of profit. Covering 86 countries for 1960-2016, the study shows that informality and the rates of profit...

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Bibliographic Details
Published inApplied economics letters Vol. 28; no. 12; pp. 1017 - 1020
Main Authors Elgin, Ceyhun, Elveren, Adem Yavuz, Bourgeois, Joseph
Format Journal Article
LanguageEnglish
Published London Routledge 12.07.2021
Taylor & Francis LLC
Subjects
Economic analysis
Economic theory
Economics
Income inequality
Informal economy
Informal sector
Longitudinal studies
panel data
profit rates
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Summary:Using two novel datasets of the size of the informal economy and income inequality, this study examines the effect of informality on income and wage inequality with special attention to the rates of profit. Covering 86 countries for 1960-2016, the study shows that informality and the rates of profit are positively associated with income inequality; however, the positive impact of profit rate on income inequality decreases as the size of informal economy increases.
ISSN:1350-4851
1466-4291
DOI:10.1080/13504851.2020.1795065