Informal Economy and Urbanization of West African Economic and Monetary Union (UEMOA) Cities

Abstract

Urbanization is a growing phenomenon in the UEMOA countries, in a context of the increasing informalization of its economies. Based on these facts, this research set out to analyze the relationship between urbanization and the size of the informal economy. This research uses the Pooler Mean Group (PMG) model to analyze the effects of urbanization on informality, and the Panel Threshold Regression (PTR) model for nonlinear analysis. It appears that the rate of urbanization has a positive effect on the size of the informal economy. Also, that the quality of institutions can reduce the above positive effect, reducing the rate of urbanization.

Keywords: Informal economy, Urbanization, Institution, PMG estimate, PTR estimate.

DOI: 10.7176/DCS/10-12-05

Publication date: December 31^st 2020