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Inequality and Size of the Informal Sector during Recession: A Note
Author(s) -
Chowdhury Sahana Roy
Publication year - 2013
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12020
Subject(s) - recession , economics , informal sector , inequality , labour economics , keynesian economics , economic growth , mathematics , mathematical analysis
This note provides a theoretical explanation for the empirical observation that more unequal economies tend to have larger informal sector. In contrary to the general belief, it shows that informal sector does not necessarily expand at the time of recession acting as a buffer for the unemployed pool.