Event Title

Informal Economy and Its Effects on Institutions in Republic of Macedonia

Session

Management, Business and Economics

Description

We live in modern times, with rapid economic development and turbulent changes in the market. As a consequence of the different trading conditions, i.e. market conditions, there is inequality on the market among the participants. The desire to earn, or the inevitability of finding a job outside the regular market flows, pushes people to create an informal or gray economy, which on the other hand creates inequality with the formal (regular) economy. Countries in transition are constantly facing this situation, and naturally the Republic of Macedonia as such faces the informal economy or informal employment. There are two situations covered by the informal employment, on one hand are the difficult existential conditions, especially in rural parts of the Republic of Macedonia, which push people to accept work without regulation of taxes and social security contributions. On the other hand, naturally, this is directly connected with the business entities that use informal employment, and it, the informal employment, enables them to increase competitiveness and faster enrichment. If the informal economy is formalized it will allow decrease of tax evasion and strengthen the flow of tax revenues. This, on the other hand, will enable providing higher quality services by the state and the institutions. In this paper will be discussed the size and widespread of the informal economy in the Republic of Macedonia, a comparative analysis of the widespread of informal economic activity between the companies in the Republic of Macedonia and the countries of the region (and member states of EU) will be made. An overview of informal employment, the most common forms of informal economy, and the efficiency of the labor market will be also given. Briefly, an overview of the previous measures and activities for formalization of the informal economy will be presented.

Keywords:

informal economy, informal employment, Republic of Macedonia, formal economy, labor market

Session Chair

Edmond Hajrizi

Session Co-Chair

Armend Muja

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-437-69-1

Location

Pristina, Kosovo

Start Date

27-10-2018 1:30 PM

End Date

27-10-2018 3:00 PM

DOI

10.33107/ubt-ic.2018.298

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Oct 27th, 1:30 PM Oct 27th, 3:00 PM

Informal Economy and Its Effects on Institutions in Republic of Macedonia

Pristina, Kosovo

We live in modern times, with rapid economic development and turbulent changes in the market. As a consequence of the different trading conditions, i.e. market conditions, there is inequality on the market among the participants. The desire to earn, or the inevitability of finding a job outside the regular market flows, pushes people to create an informal or gray economy, which on the other hand creates inequality with the formal (regular) economy. Countries in transition are constantly facing this situation, and naturally the Republic of Macedonia as such faces the informal economy or informal employment. There are two situations covered by the informal employment, on one hand are the difficult existential conditions, especially in rural parts of the Republic of Macedonia, which push people to accept work without regulation of taxes and social security contributions. On the other hand, naturally, this is directly connected with the business entities that use informal employment, and it, the informal employment, enables them to increase competitiveness and faster enrichment. If the informal economy is formalized it will allow decrease of tax evasion and strengthen the flow of tax revenues. This, on the other hand, will enable providing higher quality services by the state and the institutions. In this paper will be discussed the size and widespread of the informal economy in the Republic of Macedonia, a comparative analysis of the widespread of informal economic activity between the companies in the Republic of Macedonia and the countries of the region (and member states of EU) will be made. An overview of informal employment, the most common forms of informal economy, and the efficiency of the labor market will be also given. Briefly, an overview of the previous measures and activities for formalization of the informal economy will be presented.