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ERIC Number: EJ919846
Record Type: Journal
Publication Date: 2011-Jun
Pages: 17
Abstractor: As Provided
Reference Count: 86
ISSN: ISSN-0303-8300
Financial Satisfaction and (In)formal Sector in a Transition Country
Ferrer-i-Carbonell, Ada; Gerxhani, Klarita
Social Indicators Research, v102 n2 p315-331 Jun 2011
This 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. (Contains 2 tables and 21 footnotes.)
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Publication Type: Journal Articles; Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Location: Albania