Loughborough University
Browse
Economic Sanctions and Informal Employment.pdf (700.42 kB)

Economic sanctions and informal employment

Download (700.42 kB)
journal contribution
posted on 2024-06-06, 12:13 authored by Ali Moghaddasi-KelishomiAli Moghaddasi-Kelishomi, Roberto Nistico

This paper examines how economic sanctions affect the allocation of workers across formal and informal employment. We analyse the case of the unprecedented sanctions imposed on Iran in 2012 and focus on the manufacturing sector. Employing a difference-in-differences approach, we compare the probability of being employed in the informal sector before and after 2012 for workers in industries with different pre-existing exposure to international trade. Our analysis reveals that, following the sanctions, workers in industries with higher trade exposure are significantly more likely to experience informal employment compared to workers in industries with lower trade exposure. These results remain robust when accounting for potential sorting issues by using an instrumental variable approach. Our findings shed light on an important margin of labour market adjustment through which sanctions can affect the economy of the target country.

Funding

UNU-WIDER Detecting and Countering Illicit Financial Flows Research Grant

History

School

  • Loughborough Business School

Published in

Labour Economics

Publisher

Elsevier

Version

  • AM (Accepted Manuscript)

Rights holder

© The Author(s)

Publisher statement

This is an Open Access Article. It is published by Elsevier under the Creative Commons Attribution 4.0 International Licence (CC BY). Full details of this licence are available at: http://creativecommons.org/licenses/by/4.0/

Acceptance date

2024-06-01

Publication date

2024-06-03

Copyright date

2024

ISSN

0927-5371

Language

  • en

Depositor

Dr Ali Moghaddasi Kelishomi. Deposit date: 2 June 2024

Article number

102581

Usage metrics

    Loughborough Publications

    Licence

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC