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Abstract for 2008 Honors Colloquium

Sadie Gardner

International Relations

"Accounting for Informality: An Empirical Analysis of the Informal Economy"

The informal economy often comprises a significant portion of a developing country's GDP. As this income is not, by definition, taxed or regulated by the government, informal activity presents obvious problems, such as loss of tax revenue. Many studies of informality focus on its relationship with government intervention in the market (i.e. imposing high tax rates). I am examining how the size of a country's informal economy is affected by other variables, such as education and gender equality. I am also exploring how informal activity affects important indicators within a country, including FDI and exports.