01941cas a2200241 a 4500 AALejournalIMF016418 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513529271 1018-5941 BD-DhAAL BD-DhAAL Vargas, Mauricio. Informality in Paraguay : Macro-Micro Evidence and Policy Implications / Mauricio Vargas. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (33 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Paraguay's economy features a high degree of informality. Based on different estimation approaches, informal activity represents more than half of total employment in Paraguay, a higher rate than those observed in its Latin American and the Caribbean peers. Theoretical and empirical considerations support the notion that regulations, enforcement policies, and government effectiveness are the ultimate determinants of informality. In all of these areas Paraguay performs weakly compared to regional peers. Using household and enterprise surveys, we find that Paraguay's informal sector absorbs the most vulnerable workers but affects negatively medium and large firms in the formal sector. DSGE model simulations suggest that the optimal combination of policies to reduce informality is not straightforward, and needs to reflect the specific circumstances and objectives of the country. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2015/245 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/245/001.2015.issue-245-en.xml IMF e-Library