Topics in Middle Eastern and North African Economies

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Several empirical works have analyzed the determinants of being in informal sector. Most focus on the effect of socioeconomic factors such as level of education, regions of residence, skills acquired, and gender. The most recent works has find that institutional factors can influence decisions to undertake activities in the informal sector such as corruption, regulations and legislation (Hart, 2012; Schneider et al., 2010) or tax burden (Schneider and Enste, 2000; Ferraira-Tiryaki, 2008, Friedman and al, 2000, Frey and Torgler2007) but alternative explanation concerning the institutional factor include Portes (1994, 2005, 2010) and Burroni and al. ( 2008) concern the effect of institutional trust “Informality is curbed by institutional trust”. This article presents an empirical analysis of the determinants of being in informality for youth’s people in selected MENA countries (Algeria, Egypt, Lebanon, Morocco and Tunisia) focusing on the effect of institutional trust. The analysis of the data suggests that the general level of young people’s trust in different institutions is low. The estimation results of discrete choice model using recent survey“ SAHWA “, confirm that youth’s people trusts in institutions have a significant effect on the likelihood of being in informality. However, it seems to differ according to witch institutions are considered and by countries.

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Topics in Middle Eastern and North African Economies




Middle East Economic Association and Loyola University Chicago






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