Determinants of the level of informality of informal micro-enterprises: Some evidence from the city of Lahore, Pakistan

Type Journal Article - World Development
Title Determinants of the level of informality of informal micro-enterprises: Some evidence from the city of Lahore, Pakistan
Author(s)
Volume 84
Publication (Day/Month/Year) 2016
Page numbers 312-325
URL http://www.sciencedirect.com/science/article/pii/S0305750X1500220X
Abstract
Recognizing that enterprises operate at varying levels of informality, this paper evaluates the determinants of their degree of informality. Reporting a 2012 survey of 300 informal microenterprises in the city of Lahore in Pakistan, the finding is that the key predictors of their level of informality are the characteristics of the entrepreneur and enterprise, rather than their motives or the wider formal and informal institutional compliance environment. Lower degrees of informality are associated with women, older, educated, and higher income entrepreneurs and older enterprises with employees in the manufacturing sector. The paper concludes by discussing the theoretical and policy implications.

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