Question

Please help.

Explain one way in which the informal sector contributes positively and one way it contributes negatively to the financial sector.

Answer 1

This paper examines the relationship between working in the formal or informal sector and self-reported individual financial satisfaction in a country in transition. It does so by allowing for individual heterogeneity in terms of perceived financial insecurity and tax morale. The empirical analysis uses a dataset for Albania, a country in transition. The method applied is the ‘self-administered questionnaire’, which combines personal contacts with written questionnaire. The results indicate that, for most individuals, working in the informal sector has negative effects on their self reported financial satisfaction. For some individuals, however, this effect is positive. The characteristic defining these two groups of individuals is their attitude towards the perceived financial insecurity related to not paying taxes. These findings have important implications, in particular for transition countries with large informal sectors. Given the involuntary participation in the informal sector in these countries, the majority of individuals working in this sector will remain financially dissatisfied as long as they have no other social safety net.

Answer 2

Answer:positively cheap labour.

Then negatively Low taxes

Explanation:because it's of low level school people or drop outs who don't mind much of wages as compared to office related work or jobs

Then low taxes as a result of favour being imposed on the cheap kabour