Informalidad empresarial en Colombia: alternativas para impulsar la productividad, el empleo y los ingresos

Abstract

This document studies the determinants of firm informality in Colombia based both on a quantitative and a qualitative approach. The former is carried out using the Cali and Yumbo Enterprise Census for the year 2005, which allowed, for the first time, to analyze informality over firms of any size. Estimations show that incidence of informality among of small firms (microempresas) is strikingly large and, many times, tends to disappear with its growth. Informality in larger firms, on the other hand, is associated to other factors, such as high formality costs and lack of knowledge about the benefits of being formal. The qualitative analysis was carried out based on a series of focus groups directed to informal and formal employers. These sessions facilitated the identification of their perceptions around this phenomenon, providing important unobserved clues as to why are they formal or informal. Based on the results of these exercises, plus the analyses of international experience and some governmental incentives related to informality, some policy recommendations were formulated to increase the pace of productivity growth in Colombia and, through this channel, to increase formal employment and labor incomes. These recommendations seek to raise the net benefits of formality in Colombia.