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The Evolution of the Informal Economy in North Korea

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Authors
Kim, Byung-Yeon; Kim, Min Jung
Issue Date
2016-11-10
Publisher
Institute of Economic Research, Seoul National University
Citation
Seoul Journal of Economics, Vol.29 No.4, pp. 457-480
Keywords
North KoreaInformal economic activitiesLabor productivityPropensity score matching model
Abstract
This paper uses a survey of North Korean refugees to investigate the evolution of informal economic activities of North Korean households. We find little evidence of increases in informal economic activities in terms of the aggregate participation rate in the informal economy from 1996 to 2009. However, service and manufacturing activities in the informal economy increased during 2005–2009 at the sacrifice of informal agricultural activities. Evidence shows that labor productivity has improved in the informal service sector, whereas the informal manufacturing sector has not experienced increases in productivity. These results imply that expansion of the informal service sector contributes to North Koreas economic growth, but the lack of private property rights constrains the development of manufacturing.
ISSN
1225-0279
Language
English
URI
https://hdl.handle.net/10371/98855
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College of Social Sciences (사회과학대학)Institute of Economics Research (경제연구소)Seoul Journal of EconomicsSeoul Journal of Economics vol.29 no.1~4 (2016)
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