What question did this study set out to answer?

The research aims to explore how informal employment affects economic growth in various economic contexts, emphasizing the role of institutional factors.

March 1, 2026International Journal of Sociology and Social Policy

The role of the informal sector in economic development: evidence from developed, developing and underdeveloped economies

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Authors

RDReetika DadheechAditya Birla (India)

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Implication

Investigates the relationship between informal employment and economic growth, suggesting tailored policies for different income groups.

Key Points

The research aims to explore how informal employment affects economic growth in various economic contexts, emphasizing the role of institutional factors.
Utilized a balanced panel dataset of 161 countries from 2011 to 2019.
Employed long-run econometric estimators to address endogeneity and other statistical issues.
Incorporated a quadratic specification to identify non-linear effects of informality on growth.
Found an inverted U-shaped relationship where moderate informality supports growth, but excessive informality hinders it.
Demonstrated positive impacts of economic freedom and government expenditure on growth.
Indicated that unemployment has a short-run positive effect by driving workers into informal employment.

Cite This Study

Reetika Dadheech (2026) studied this question.

synapsesocial.com/papers/69a3d856ec16d51705d2f1e3 https://doi.org/10.1108/ijssp-02-2025-0122

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The role of the informal sector in economic development: evidence from developed, developing and underdeveloped economies

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Implication

Key Points

Cite This Study

The role of the informal sector in economic development: evidence from developed, developing and underdeveloped economies

Discussion

Member takes

Implication

Key Points

Cite This Study

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