Poverty Alleviation Strategies under Informality: Evidence for Latin America

Abstract

The views expressed herein are those of the authors and do not necessarily reflect the views of the Latin American and the Caribbean Economic Association. Research published in this series may include views on policy, but LACEA takes no institutional policy positions. LACEA working papers are circulated for discussion and comment purposes. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

Honduras Poverty Assessment: Toward a Path of Poverty Reduction and Inclusive Growth

“…Also, given that close to the full universe of poor in Honduras works in the informal sector, poverty alleviation strategies should be adapted to these settings. Cash transfers might deter those working in the informal sector from switching to the formal sector and additionally reduce the efficiency of targeting schemes (Galiani, Bloeck, and Weinschelbaum 2018). More evidence should be generated on the interaction between cash-transfer programs and informality, given that cash transfers to the informal population could potentially disincentivize formalization.…”