Informalidad empresarial en Colombia

Abstract

There are few reliable sources to identify firm informality in Colombia, but the household survey allows us to approximate it in 60% of firms, 37% of the workers and a third of the value added generated by urban areas. The prevalence of informality contrasts with the benefits of informality in terms of worker’s wellness, productivity and fulfillment with the tax, labour and environmental normative, among others. The answer to this paradox can be explain because the high productivity firms are the only ones where the monetary benefits of formality exceeds its costs. This analysis also allows us to estimate s simplified version of Ulyssea’s (2017) model to the Colombian case. Particularly: 1) enforcement policies should focus on firms with medium to high productivity. Enforcement applied on low productivity firms might reduce informality but also wealth. 2) policies reducing the cost of being formal should be applied only to firms with some potential to become formal and, most prefereable, should be accompanied by other productivity policies.