Impact of improved productivity in the informal sector
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Impact of improved productivity in the informal sector

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This paper analyzes the influence of the informal sector on the Senegalese economy. A two-sector DSGE model is used for the simulations. Deterministic and random shocks to informal sector productivity are simulated. The results showed that, following a 5% annual increase in informal sector productivity over 10 years, aggregate output would rise by an average of 2%, that of the informal sector would increase by 4.9%, while that of the formal sector would be virtually unaffected. The impact on the economy's productivity would be positive, given the preponderance of the informal sector. The resul...