This chapter presents a methodology to assess the potential effectiveness of social and economic policies, implemented during the COVID-19 pandemic, in increasing formality, and facilitating the transition from informality to formality, of both workers and enterprises. This methodology consists of building a Policy Assessment Framework that can inform about the possible impact of diverse policy initiatives on informality. The Framework results from a thorough review of a large number of studies and meta-analyses that used a variety of estimation methods, for a large number of different countries, to evaluate the impact of a given policy intervention on informality. The chapter applies the preliminary Framework to the policies and measures implemented by the governments of Egypt, Iraq and Jordan during the COVID-19 pandemic and beyond, to examine how they may affect formalisation.
Informality and Structural Transformation in Egypt, Iraq and Jordan
6. Economic and social policies and their impact on formalisation: Developing a Policy Assessment Framework
Abstract
The three countries under study in this report, namely Egypt, Iraq and Jordan, implemented a large number of policies and programmes that attempted to address the detrimental effects of the COVID-19 pandemic. Some policies aimed to provide immediate support through social protection programmes, either creating new programmes or expanding access and coverage of existing ones.1 Other policies were targeted towards specific types of workers or enterprises, expanding social insurance benefits, reducing taxes or fees or providing increased access to finance. While these policies and programmes had a direct impact on welfare, in this chapter we investigate their potential impact on informality and on the transition of firms and workers from informality to formality.
6.1. Research methodology and data collection
A systematic evaluation of policy and programmatic impacts ideally entails a rigorous data collection process both at baseline and at several points during and after the programme implementation, and a deliberate experimental design that randomises the treatment among otherwise largely similar beneficiaries; or a large-scale data collection exercise combined with econometric estimation to account for potential endogeneity and other estimation issues. Due to the nature of the COVID-19 pandemic, i.e. a sudden and unexpected event, a systematic evaluation using Randomized Control Trials (RCTs) would have been difficult and challenging to implement without jeopardizing equity.2 Moreover, few countries in the region have released large scale national surveys conducted both before and after the pandemic that can be used for econometric estimation of impact.3
This report proposes a Policy Assessment Framework to understand the potential impact of policies implemented during the COVID 19 pandemic on informality of employment and enterprises. The Framework aims to identify “what works”: effective policies that enhance formalisation or reduce informality. The framework is based on evidence from the literature, covering large groups of countries under varying socioeconomic contexts. The effects of these policies on formalisation can, however, vary in magnitude and direction, presenting diverse implications across different contexts and studies. Given the variability of results across previous studies, employing meta-analysis (Box 6.1) proves to be a valuable statistical tool in deriving accurate and informed conclusions on the effect of a given policy or programme. To construct the Framework, we relied on literature that uses meta-analyses and systemic literature reviews. When no meta-analysis or systemic literature review was available, we relied on single empirical studies covering several countries, where the studies selected presented results validated for all countries and used several estimation methods.
The Framework does not extensively cover a range of policy areas such as education quality, reskilling and upskilling, social economy, or sustainable investment, that may support formalisation. These limitations are acknowledged as our primary objective centered on delineating the impact of policies implemented during the COVID-19 pandemic specifically, and hence the definition and scope of the Policy Assessment Framework was driven by those policies, rather than encompassing all potential policy aspects that could affect informality.
Box 6.1. Meta-analysis and policy design
Meta-analysis is a statistical method used to combine results from multiple studies that have investigated the same research question, with the goal of producing a single, summary estimate of the effect. It is a quantitative research method that involves systematically reviewing, synthesizing, and analysing the results of multiple independent studies.
The first step in a meta-analysis is to clearly define the research question, including the type of studies to be included, the specific outcomes of interest, and any other relevant criteria.
Next, researchers conduct a systematic search of the relevant literature, using specific criteria to identify studies that meet the inclusion criteria. They extract relevant data from each study, including information about the study design, participants, interventions or exposures, outcomes, and effect sizes.
The extracted data is then analysed statistically to produce a summary estimate of the effect. This can involve using a range of statistical methods, depending on the nature of the data and the research question.
Finally, the results of the meta-analysis are interpreted in the context of the original research question and the available evidence.
Meta-analysis can be used to synthesize results from a wide range of study designs, including randomized controlled trials, observational studies, and quasi-experimental designs. It can be especially useful when there are several similar impact assessments or evaluations with or without consistent outcomes, or when there are smaller to medium-sized assessments or trials with inconclusive results.* In such cases, a meta-analysis can help to synthesize the results of multiple studies, clarify the overall impact or magnitude of an intervention or exposure, and identify factors that may be influencing the results. This allows policymakers to make more informed decisions based on a comprehensive and objective assessment of the evidence.
For example, an influential set of studies on the effect of minimum wage on employment by Card and Krueger (1993[1]; 1995[2]) concluded that the increase in the minimum wage did not decrease employment, contradicting economic theory and many previous studies. These findings were supported, with some variations in magnitude and among specific groups, by several more recent meta-analyses by Reich, Allegretto and Montialoux (2019[3]); Allegretto et al. (2018[4]), Doucouliagos and Stanley (2009[5]), and Belman and Wolfson (2014[6]); meta-analysis by Broecke, Forti and Vandeweyer (2017[7]) found some indication that more vulnerable groups (youth and the low-skilled) are marginally more adversely affected, and that higher minimum wages lead to more informal employment.
Note: * When analysing individual studies, it is common to encounter varying results and conclusions. However, the reliance on meta-analysis and systematic review techniques offers a powerful means to statistically evaluate these effects, accounting for the diversity of contributions and highlighting the most prevalent and statistically significant outcomes. This process is akin to analysing microdata, where individual behaviours may vary, but statistical analysis unveils the modal behaviour, effectively revealing the overarching trends and patterns within the data.
The Policy Assessment Framework is divided into two broad categories of policies: "carrots/incentives" and "sticks/law enforcement", referring to policies that are intended to create incentives for higher formality or transition from informality to formality vs those meant to penalize or to ban informality, respectively. Within each category (carrots or sticks), we identified a number of common policy initiatives, as presented below. The rationale for the inclusion of policies under the category of carrots or sticks is discussed in Section 6.2, when introducing the policy initiatives reviewed for this report.
Carrots/Incentives
Non-contributory social assistance policies, including conditional and unconditional benefits
Social insurance and other occupational related policies
Active labour market policies
Business and financial services related policies
Sticks/ Law Enforcement
Laws and regulations on labour and business formality and their enforcement
Within each one of these sub-categories, governments can implement a variety of different interventions that may have an impact on formality. Based on a careful review of the meta-analyses identified and of relevant literature, we were able to answer several important questions about the potential impact of each policy or measure on formality (the share of formal workers or firms) and formalisation (the transition from informal to formal):
Does the policy increase formality?
Does the policy increase informality?
Does the policy encourage the transition from informality to formality?
Does the policy encourage the transition from formality to informality?
Table 6.1 presents a preliminary Policy Assessment Framework (PAF), divided into the five broad policy categories. Within each one of these categories, there are many possible specific measures, and we present the evidence for each separately, where information from the literature was available. In cases where we did not find studies that examined the impact for similar policies, we left the cell empty.
For example, under the “non-contributory social assistance” category of policies, unconditional cash transfer (first row) was not found to increase the rate of formality (column 3) according to the literature. However, it may increase informality (column 4) as the recipients receive the benefit without having to bear any costs associated with becoming formal. We were not able to find studies that examined whether such policies encourage the transition from informal to formal, and we, therefore, left the cell empty (column 5). Finally, available studies found no evidence that such unconditional cash transfers encourage the transition from formal to informal (column 6). These inferences are based on Canelas and Niño-Zarazúa (2022[8]), who reviewed several studies from Asia and the Pacific, Latin America, and Africa.
Table 6.1. Policy Assessment Framework
Notes:
1. See Canelas and Niño-Zarazúa (2022[8]) for the case of general subsidies (non-contributory social assistance) and Martinelli (2017[25]), for the particular case of universal basic income.
2. Among the small number of studies that investigated this issue there is some evidence that universal subsidies, when offered in parallel to contributory social insurance policies, can lead to a substitution effect and higher share of informal employment. These effects are however small and only found among specific populations hovering around the formal and informal sector and “that are close to the cut-off point that separates the formal from the informal economy, [that are] associated with programmes that provide relatively generous benefits, or that adopt targeting mechanisms via means-tests or proxy-means tests” (Canelas and Niño-Zarazúa, 2022[8]).
3. and 4. Few studies, and therefore meta-analyses, have examined the effect of conditional cash transfers (CCTs) on informality, and results are mixed. Barbosa and Corseuil (2013[26]) evaluated the Bolsa Familia programme and found no impact of CCTs on occupational choice between formal and informal jobs for Brazilian adults. Teixeira (2010[27]) studied the same programme and found that CCTs marginally reduced working hours, with the effect more pronounced among informal workers. Baird, Mackenzie and Özler (2018[28]) summarise results of several studies examining the effects of cash transfers on adult labour market outcomes and conclude that there is generally little impact of CCTs on adult labour choices, unless they are associated with a specific employment focus such as job search and matching, or business start-up. It is worth noting that these are not based on meta-analyses, but several individual case studies, and are highly dependent on the country context and the type of beneficiary and intervention.
4. Found to be effective during shocks to reduce layoffs, but again temporary while subsidy is in effect.
5. Jessen and Kluve (2021[13]) find a small but consistently positive effect on formality using meta-analysis methodology.
6. Mehrotra (2020[10]) provides a summary of several case studies where increased inspections or enforcement of laws and regulations pertaining to formality had a positive effect on formality, and on transition from informality to formality.
7. Jessen and Kluve (2021[13]), Mehrotra (2020[10]) and Van Elk, De Kok, Durán, and Lindeboom (2014[11]). The latter also provides examples of case studies where enforcement worked better than information campaigns or waiving registration costs.
Figure 6.1 presents a summary of the different policy categories and the most important conclusions about formality (the share of formal workers or firms) and formalisation (transition from informal to formal) with reference to specific commonly adopted measures.
Figure 6.1. Summary of Policy Assessment Framework
6.2. Applying the Policy Assessment Framework to policies from Egypt, Iraq, and Jordan
This section applies this preliminary Framework to the policies and measures implemented by the governments of Egypt, Iraq and Jordan during the COVID-19 pandemic and beyond, to examine how they may affect formalization. We collected detailed and comprehensive information on policies implemented since the onset of the pandemic from several different policy trackers: IPC-IG, World Bank, IMF, ILO Social Protection Tracker, UNESCWA and UNDP-UN Women Gender Tracker. and for Egypt, the Policy Tracker established by the Ministry of Planning and Economic Development (https://policytracker.mped.gov.eg).
For Jordan we also consulted several national sources such as the Social Security Corporation (https://www.ssc.gov.jo/en/home/), the Ministry of Labor (https://mol.gov.jo/), the National Aid Fund annual reports (https://naf.gov.jo/EN/List/Annual_reports), for additional detailed and up to date information on programme/policy duration, number of beneficiaries and cost, where available. In Iraq, updates provided by the Cabinet on interventions and responses to COVID-19 were also consulted.
Relying on the framework above, we grouped the different policies into categories that would have similar impact on formality, informality or on the transition from informality to formality and vice versa. It is worth bearing in mind that the framework aims to assess the effect of policies uniquely on informality and transitions in /out of it, and not on other outcomes, such as population welfare or enterprise performance.
We begin with the group of policies that can be considered incentives or “carrots” for formalisation. Table 6.2 presents Non-contributory Social Assistance policies and measures implemented by each of the three governments, a brief description of each programme and the expected impact. Notwithstanding the important positive impact of these programmes on population welfare and their significant role in dampening the effects of the crisis, the literature presented in the Framework finds that this category of programmes/policies does not tend to increase formality.
Canelas and Niño-Zarazúa (2022[8]), using meta-analysis, found that the expansion of non-contributory social protection does not increase formality. They noted through ILOSTAT data that, as expected, there is strong negative correlation between the scale of the informal economy and the share of workers that have access to contributory social insurance; this correlation is instead much weaker in the presence of non-contributory schemes.
The small number of studies that have investigated the impact of non-contributory policies on informality found some evidence that when universal subsidies are offered in parallel to contributory social insurance policies, they can lead to a substitution effect and a higher share of informal employment. These effects are however small and only among “specific populations that are close to the cut-off point that separates the formal from the informal economy, associated with programmes that provide relatively generous benefits, or that adopt targeting mechanisms via means-tests or proxy-means tests”.4
There is no evidence that non-contributory programmes create incentives for formal workers to become informal.
In general, the prime purpose of social protection systems, particularly non-contributory schemes, is not to formalise employment and therefore they alone are insufficient policy tools to promote formality. Obviously, improving the working conditions of those in the informal economy until the actual transition to formality takes place whether by providing social protection, including through non-contributory schemes, or by improving other working conditions of informal workers, is of the utmost importance, even if it does not facilitate the transition directly.
Table 6.2. Non-contributory social assistance policies and programmes: Potential impact on informality
The second category of identified measures and programmes is Expanding Contributory Social Insurance Schemes, which includes contributory social protection programmes that provide compensation in case of lifecycle risks or contingencies such as sickness, work injury, invalidity/disability, unemployment, maternity/paternity, death of a spouse or parent, old age. In addition, schemes that fall under ‘financial services’ were also included that helped in reducing debt burden through deferring loan payments and tax relief (White, 2016[29]).
Table 6.3 presents several programmes that expanded or provided additional benefits through social insurance programmes. As presented in the Framework (Table 6.1), evidence from the literature suggests that such expansion of social insurance schemes has some positive effects on increasing formality. Indeed, workers do their own cost-benefit analysis and realise the substantive benefits of paying social insurance for themselves and their families in a crisis situation. However, while some studies show that the effect of policies aiming at expanding social insurance is positive in the long term (Peksevim and Akgiray, 2019[30]), other studies find that such effects tend to be temporary, dissipating once the programme ends.
Among the few studies that investigated the other three policy categories (i.e. tax incentives, information campaigns, wage payments/support):
Tax incentives have no impact on increasing informality, and a small positive effect on the transition from informal to formal. Indeed, tax incentives are often more targeted at incentivising investment; instead, simplified tax regimes (also referred to as “presumptive tax regimes”) ease regulatory requirements, compliance costs, and in some cases the tax burden, therefore encouraging formalisation.
Similarly, financial incentives of deferring debt payments also had limited impact on transition to formalisation and no impact on increasing informality.
Wage payments or support and paid leaves during crises were not found to have any impact on informality or on transitions in both directions.
In Table 6.3, blank entries reflect other policies where no studies were found that examined their impact on the four questions under consideration. It is worth noting that the effects of temporary social protection programmes may not necessarily be limited to the short term. The underlying philosophy of social protection is to provide temporary interventions by the state to assist vulnerable and impoverished populations in becoming self-sufficient in the future. Therefore, it would be valuable to explore the impact of these temporary programmes on informality, as they could potentially serve as a steppingstone towards more sustainable initiatives in the long run. In fact, promoting formalisation should involve a combination of policies, including raising awareness among workers and employers about the benefits of formal employment.
Table 6.3. Programmes expanding Contributory Social Insurance Schemes: Potential impact on informality
The third category of programmes is Active Labour Market Policies (ALMPs) that aim to help individuals enter the labour market or to prevent already employed individuals from losing their jobs. There are several types of ALMPS, as shown in the Framework. Governments in the three countries implemented policies that fit under vocational training programmes, search and matching assistance, and wage subsidies (Table 6.4).
ALMPs programmes can have a strong impact on increasing formality as well as the transition from informality to formality. Vocational training programmes aim to raise or improve the skill level of workers and hence their productive capacity and value added which could improve their ability to find jobs in the formal economy. The rationale is to make workers a more valuable addition to the firm and hence raise their chances of landing formal jobs which are typically more expensive for the firm. Search and matching programmes and wage subsidies can also increase formalization by creating better linkages between supply and demand sides of the market, and by covering some of the high cost of hiring new workers (or keeping workers employed during crises), respectively. Typically, such wage subsidies were only provided for formal workers and therefore may have also increase the workers’ own desire to work formally in cases where informality is a choice, e.g. some highly educated workers may choose to avoid the cost of formality and/or do not see its benefits (Merouani, El Moudden and Hammouda, 2021[31]; Merouani, 2023[32]).
Based on the Framework, there is evidence that the first two types have strong positive impacts on increasing formality and in the case of vocational training also on transition from informal to formal. Wage subsidies were found instead to have only temporary effects on increasing formality while the programme is in effect, and there is even some evidence that they may create ‘replacement’ in the labour market where firms replace existing workers with those who receive the subsidy vouchers, thereby having a negligible effect overall (Groh et al., 2016[33]).
Table 6.4. Active labour market policies: Potential impact on informality
The fourth category of programmes includes a number of financial services including access to subsidised loans, loan moratoria, and flexibility on loan payments (Table 6.5). Access to such financial services typically requires the firms to be formal, and thus represents an incentive to formalise. Moreover, by helping enterprises to expand and grow, such financial services increase the profitability of enterprises and by extension their need for more workers and their ability to hire them formally.
These policies were found to have positive effects on formality, especially for programmes that have longer time horizons and that succeed in helping the enterprises grow and increase their overall profitability. According to the literature, growing access to financial services as well as more flexibility in credit have coincided with a falling share of the informal economy. Subsidised loans and payments flexibility have a strong positive impact on the real activity of SMEs as they can encourage capital accumulation and productivity improvements, and thus enhance long-run economic growth, particularly in the presence of informality (Antunes and Cavalcanti 2007), (World Bank, The Long Shadow of Informality: Challenges and Policies, 2021).
Table 6.5. Financial Services policies: Potential impact on informality
While no new policies implemented during the pandemic were found that fall under the “sticks/law enforcement” category – which is an interesting result in itself, Jordan already had in place several laws and regulations that mandated coverage of workers and enterprise registration and we mention these here for completion. For example, the Social Security Law (No. 1 of 2014) requires coverage of employees “without any discrimination as to nationality, and regardless of the duration or form of the contract” and regardless of the number of employees in the establishment (ILO, 2021[37]). Routine checks are performed by the government agencies in charge and if an employer is found to be in violation, they are charged hefty fines.7 In practice however, this law does not apply to anyone working fewer than 16 days in a given month, which is the case for most agricultural workers and domestic workers. Migrant workers who are own-account workers, employers or contributing family members are also not covered by the law and not even eligible to enrol in the voluntary social security programme (ILO, 2021[37]).
6.3. Case studies of successful transition from other world regions
In this section we present case studies of policy initiatives that have helped facilitate successful transition from informality to formality from around the world.
A relevant case is Uruguay’s Social Security System, which extended healthcare coverage to dependents of beneficiary workers. The reform was financed by an increase in payroll tax contributions of workers and had a positive effect on formality among salaried workers with children and also among those married to workers in the informal economy because prior to the reform, they had to pay out of pocket for their children’s healthcare. The results show that probability of informality declined by 5%. Workers with children were 1.3 percentage points more likely to become formal compared to workers without children. Female workers were also more likely to register compared to male workers.
An example of temporary impact comes from Nicaragua. In 2007, the government allowed informal workers to join the social insurance system through microfinance institutions. Informal workers had to pay a monthly premium of USD 15 and this premium was subsidised during the first year of the programme. While one third of the microentrepreneurs registered during the first year, only 10% remained enrolled after the subsidy ended (Hatt et al., 2009[38]).
In Sri Lanka, De Mel, McKenzie, and Woodruf (2013[39]) conducted a field experiment on incentives for informal firms to formalize. They found that offering only information about the registration process and reimbursement for direct registration costs had no impact on increasing formality. However, adding payments equivalent to between one-half and one full month’s profits for the median firm, led to registration of around one-fifth of firms. Further, offering a larger payment equivalent to two months’ median profits induced half the firms to register.
In Vietnam, Nguyen, Verreynne, and Steen (2014[40]) used data from four firm surveys (conducted in 2005, 2007, 2009 and 2011) to understand the determinants of transition from informal to formal firms. They found that government-supported finance was associated with transition to formality. Such support encouraged firms to enter the formal economy rather than face the costs associated with remaining informal.
De Giorgi, Ploenzke and Rahman (2017[41]) conducted an experiment in which firms were visited by representatives who delivered an official letter from the Bangladesh National Tax Authority stating that the firm is not registered and threatening punishment if it fails to register. They found that the intervention increased the rate of registration among treated firms, while firms located in the same market but not treated did not seem to respond significantly. The study also found that only larger-revenue firms at the baseline responded to the threat and registered.
Several countries have adapted their legislative framework to include non-traditional categories of workers, such as those in the “gig” economy, into the labour law. These examples can also be adapted to many types of informal and self-employed workers. In France, LeCab drivers (competitor of Uber) were classified as employees and are now covered by social security and the labour law. In Spain, the law ensures that self-employed workers, who earn more than 75% of their income from one client, are mandatorily covered under employment injury insurance (ILO, 2021[42]).
Some countries like Uruguay and Indonesia have used innovative approaches to secure coverage of workers of the ride-hailing applications. They used a digital mechanism to ensure that ride-hailing applications automatically add a small social insurance contribution to the price of each ride (ILO, 2021[42]). In India, an innovative programme provided coverage to workers in the construction sector where the majority of workers are informal and irregular. The building companies were required to contribute 1-2% of the value of each project to fund social protection benefits for the workers involved in each project (ILO, 2021[42]).
6.4. Concluding remarks
The Policy Assessment Framework developed in this study provides a tool for policy makers across the Arab region to assess the possible impact of diverse social and economic policies on informality, with a view to assist the design of policies that can increase formality and facilitate the transition from informality to formality.
The Framework results from a thorough review of a large number of studies and meta-analyses that have used a variety of estimation methods, including experimental and quasi-experimental methods, for a large number of different countries, to evaluate the impact of a given policy intervention on informality. Distinguishing between incentive and penalty type-policies, the Framework classifies policies into five main categories: 1) Non-contributory social assistance policies, including conditional and unconditional benefits; 2) Social insurance policies and other occupational social benefits; 3) Active Labour Market Policies; 4) Business and financial services related policies; and 5) Law and regulations on labour and business formality and their enforcement.
The findings point to the following:
Non-contributory social assistance benefits do not encourage formality and may result in the opposite transition, from formal to informal sector if the benefits are large.
Social insurance policies were found to have temporary positive impacts on formality and transition from informal to formal (where studies were available) while the programme was in place.
Active labour market policies often have small or temporary but positive effect on formality.
Business and financial service policies also have a small positive effect on formality, and it was found that the larger the perceived benefit from formality the more likely the impact.
The “stick” category, i.e. laws combined with strict enforcement, seem to have a strong positive impact on formality, provided these laws are applied fairly and uniformly across all stakeholders.
6.4.1. Toward formalisation
A conclusion from the analysis is that a few policy options are the most effective in increasing formality and facilitating transitions to formality for existing informal firms or workers, namely:
Making social insurance more affordable and accessible, including for agricultural workers, migrants, other vulnerable workers, both in terms of cost and procedural requirements is key.
Active labour market policies in the form of training and wage subsidies are helpful, even if just temporary and can especially help create a precedent in favour of hiring particular groups such as women and youth.
More fair and consistent law enforcement that applies equally can go a long way in facilitating transition to formality.
The most effective programmes usually involve a combination of incentives and law enforcement, both creating more benefits to formality, while also stepping up enforcement in a fair and uniform way.
Finally, temporary programmes are likely to produce results that are also temporary. With one remark, though: governments can build on these temporary programmes, when successful, to create more sustainable initiatives. Indeed, it should be acknowledged that many temporary programmes have long term impacts by creating a precedent.
6.4.2. Improving working conditions of informal workers
It is important to stress that a comprehensive package is needed to improve working conditions of workers in the informal economy while simultaneously promoting the longer-term goal of formalisation. To that aim, non-contributory social assistance schemes remain important along with the contributory ones, as there is substantive evidence of how financial need, poverty and vulnerability can lead to informality. Actions in the form of raising awareness among workers and firms about the benefits of formalisation, as well as policies that target the demand side by promoting decent and formal job creation in targeted sectors through broad economic reforms and industrial policy are also critical.
These recommendations should be implemented through a social dialogue involving the relevant actors within each country, to ensure that all stakeholders are on board while taking local contexts into consideration.
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For further reading
Boly, A. (2018), “On the Short- and Medium-Term Effects of Formalisation: Panel Evidence from Vietnam.” The Journal of Development Studies 54 (4): 641–56, https://doi.org/10.1080/00220388.2017.1342817
Canelas, C. and Niño-Zarazúa, M. (2022), Informality and pension reforms in Bolivia: The Case of Renta Dignidad, The Journal of Development Studies.
Chen, Martha (2005), “The Business Environment and the Informal Economy: Creating Conditions for Poverty Reduction.” https://www.wiego.org/sites/default/files/migrated/publications/files/Chen-Business-Environment-and-the-IE.pdf
Dabla-Norris, E., M. Gradstein, and G. Inchauste (2008), “What Causes Firms to Hide Output? The Determinants of Informality.” Journal of Development Economics 85 (1–2): 1–27. https://doi.org/10.1016/j.jdeveco.2006.05.007
Gajigo, Ousman, and Mary Hallward-Driemeier (2012), “Why Do Some Firms Abandon Formality for Informality? Evidence from African Countries.” African Development Bank, Working Paper Series 164.
GSMA (2015), Digital inclusion and mobile sector taxation in Jordan. Prepared by Deloitte LLP.
Hlasny and AlAzzawi (2022), “Last in After COVID-19: Employment Prospects of Youths during a Pandemic Recovery”, Forum for Social Economics, Vol.51/2, pp. 235-244.
ILO (2020), From Informal to Formal: A Meta-Analysis of What Triggers the Conversion in Asia.
ILO (2021), “Opportunities for extending social security coverage in Jordan”. ILO Regional Office for the Arab States, ILO, Geneva.
IPC-IG (2021), Social Protection Responses to COVID-19 in the Global South: Tracking Matrix
McKenzie, David, and Y. S. Sakho (2010), “Does It Pay Firms to Register for Taxes? The Impact of Formality on Firm Profitability.” Journal of Development Economics 91 (1): 15–24.
UNDP (forthcoming), “Implications of the War in Ukraine on the Arab States Region” RBAS Working Paper.
UNDP (2022), Arab Human Development Report 2022 Expanding Opportunities for an Inclusive and Resilient Recovery in the Post-Covid Era. New York: UNDP.
World Bank (2022), “Jobs Undone: Reshaping the Role of Governments toward Markets and Workers in MENA” https://www.worldbank.org/en/region/mena/publication/jobs-undone-reshaping-the-role-of-governments-toward-markets-and-workers-in-the-middle-east-and-north-africa.
Notes
← 1. Expanding coverage involves adjusting the eligibility criteria or addressing cases where individuals were excluded by error or left behind because of the limited fiscal space.
← 2. By their design, RCTs would only provide the support (treatment) to a random selection of beneficiaries and no support (or a different level/type of support) to the control group, thereby creating inequity in access to support during a situation of crisis.
← 3. In some cases, large-scale surveys were conducted but the data collected were not made publicly available to researchers.
← 4. Blank entries in Table 6.1 indicate that we were not able to find studies that have investigated this question in the literature: for example, to the best of our knowledge, no studies investigated the effect of unconditional cash transfers and universal subsidies on the transition from informality to formality.
← 5. The Social Insurance and Pensions Law, issued by Law No. 148 of 2019, identifies irregular workers as church clergy, cleaning staff and domestic helpers, traveling workers, temporary agricultural workers and farmers, owners of agricultural land that is less than one acre large and unused land.
← 6. This is the latest available information at the time of writing.
← 7. Based on interviews with the Jordanian Ministry of Labour officials.