INFORMAL SECTOR HETEROGENEITY AND INCOME INEQUALITY: EVIDENCE FROM THE DEMOCRATIC REPUBLIC OF CONGO

This paper empirically identifies three types of entrepreneurs in the Congolese informal sector, namely top-performers, constrained gazelles and survivalists. Based on logit and fixed effect OLS models, the paper finds that poverty and income inequality are more common among constrained gazelles and...

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Bibliographic Details
Published inJournal of economic development Vol. 47; no. 4; pp. 55 - 77
Main Authors Adoho, Franck M, Doumbia, Djeneba
Format Journal Article
LanguageEnglish
Published Seoul The Economic Research Institute, Chung-Ang University 01.12.2022
Subjects
Developing countries
Entrepreneurs
Income distribution
Income inequality
Industrialized nations
Informal economy
LDCs
Managerial skills
Productivity
Questionnaires
Self employment
Value added
Congo-Democratic Republic of Congo
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ISSN0254-8372

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Summary:This paper empirically identifies three types of entrepreneurs in the Congolese informal sector, namely top-performers, constrained gazelles and survivalists. Based on logit and fixed effect OLS models, the paper finds that poverty and income inequality are more common among constrained gazelles and survivalists. Results also show that income inequality is explained mainly by educational disparities and lack of credit access among entrepreneurs. The outcomes of a Blinder-Oaxaca decomposition show that the performance of firms is a key factor in explaining differences in income. Moreover, the paper finds that human capital and managerial skills are important engines of performance.
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ISSN:0254-8372