Income Inequality and the Informal Economy in Transition Economies

@inproceedings{Rosser2000IncomeIA,
  title={Income Inequality and the Informal Economy in Transition Economies},
  author={J. Barkley Rosser and Marina Vchershnaya Rosser and Ehsan Ahmed},
  year={2000}
}
For transition economies, income inequality is positively correlated with the share of output in the informal economy. Increases in income inequality also tend to be correlated with increases in the share of output produced in the informal economy. These hypotheses are supported significantly by empirical data for 16 transition economies between 1987 to 1989 and 1993 to 1994. Various causal mechanisms may operate in both directions, an increasingly large informal economy causing more inequality… CONTINUE READING

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