Competing perspectives on the Latin American informal sector

Abstract

The informal sector has gained increasing attention among social scientists and policymakers concerned with Third World development. The authors trace the demographic and economic processes that set the framework for the emergence of this phenomenon in Latin America and examines competing perspectives on its character and consequences. Two such perspectives offer polar views of the informal economy. Conceptual and empirical anomalies associated with each view have given rise to a third, intermediate position. Measurement strategies and empirical estimates of informal activity associated with each theoretical perspective are presented. The significance of these differences for policies targeted on urban labor absorption and economic development is highlighted. -Authors