Thesis Public Defense | VNP29 - Ngô Minh Hiếu

Digital disparity: insights from the informal economy perspective

Student: Ngô Minh Hiếu, VNP-29

Supervisor: Dr. Nguyễn Quang

Abstract:

The primary objective of this study is to explore the varied effects of information and communication technologies (ICTs) on the size of the informal economy, considering different levels of development, socio-geographic contexts, and sectors. Using three distinct datasets that capture various dimensions of the informal economy and four ICT indicators spanning the period from 2000 to 2015, the study suggests that ICTs contribute to a reduction in the size of the informal economy. However, this impact is not uniform across all contexts. First, ICTs have a greater effect on reducing the relative size of the informal economy in middle- and high-income countries than in low-income countries. Interestingly, the influence of ICTs is more pronounced in middle-income countries than in high-income ones. Second, the findings suggest that increased ICT adoption, as indicated by internet and mobile phone usage, reduces the rate of informal employment more rapidly in urban areas than in rural ones. Lastly, ICTs are associated with a more significant decline in informal employment in nonagricultural sectors than in agriculture. These findings imply that information technology can be an effective tool for governments seeking to formalize the informal sector, particularly in middle-income countries, urban areas, and non-agricultural sectors.

Keywords: Informal economy; Shadow economy; Information and Communication Technologies (ICTs); Digital divide; Digital disparity
JEL Classification: D63, E26, J46, L86, O17