Determinants of the Level of Informality of Informal Micro-Enterprises: Some Evidence from the City of Lahore, Pakistan
15 Pages Posted: 13 Dec 2015
Date Written: 2015
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 micro-enterprises 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.
Keywords: entrepreneurship, informal sector, micro-enterprise, Asia, Pakistan
JEL Classification: H26, J46, K42, O17
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