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Financial Satisfaction and (in)formal Sector in a Transition Country

AuthorsFerrer-i-Carbonell, Ada ; Gërxhani, Klarita
Issue Date2011
PublisherKluwer Academic Publishers
CitationSocial Indicators Research 102(2): 315-331 (2011)
AbstractThis paper examines the relationship between working in the formal or informal sector and self-reported individual financial satisfaction in a country in transition. It does so by allowing for individual heterogeneity in terms of perceived financial insecurity and tax morale. The empirical analysis uses a dataset for Albania, a country in transition. The method applied is the 'self-administered questionnaire', which combines personal contacts with written questionnaire. The results indicate that, for most individuals, working in the informal sector has negative effects on their self reported financial satisfaction. For some individuals, however, this effect is positive. The characteristic defining these two groups of individuals is their attitude towards the perceived financial insecurity related to not paying taxes. These findings have important implications, in particular for transition countries with large informal sectors. Given the involuntary participation in the informal sector in these countries, the majority of individuals working in this sector will remain financially dissatisfied as long as they have no other social safety net. © 2010 The Author(s).
Description17 páginas, 2 tablas.-- Open Access: This article is distributed under the terms of the Creative Commons Attribution Noncommercial License
Identifiersdoi: 10.1007/s11205-010-9684-6
issn: 0303-8300
e-issn: 1573-0921
Appears in Collections:(IAE) Artículos
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