Negative and positive impact of an informal sector
Answers
Negative Impact:
Competition is therefore distorted because inefficient informal players stay in business and prevent more productive, formal companies from gaining market share. Any short-term employment benefits of informality are thus greatly outweighed by its long-term negative impact on economic growth and job creation.Additionally, employees within this sector often receive good pay as their employers have no tax obligations. What is more, employee effort in this sector of the economy is often directed towards achieving a loyal customer base through the creation of the best goods or products.
Positive Impact:
Additionally, employees within this sector often receive good pay as their employers have no tax obligations. What is more, employee effort in this sector of the economy is often directed towards achieving a loyal customer base through the creation of the best goods or products.
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