Trade Liberalisation and the Formal-Informal Sector Dichotomy in Nigeria
This study assesses the role of trade liberalization on the formal-informal sector of Nigeria. It looks at whether or not the trade liberalization process have any effect on both the reduction in the wage differential between registered and non-registered (roughly formal and informal) workers and the fall in the proportion of registered workers. The study uses both secondary and primary data via the administration of questionnaires to discuss the channels through which trade liberalization could affect these two variables and put forward an empirical approach to test the existence of any correlation between them. The results suggest that the fall in the wage gap between registered and non-registered workers in the manufacturing sector was affected by trade-related variables, particularly, by the import penetration ratio. However, we do not find robust evidence that trade liberalization had a substantial effect on the fall in the proportion of registered workers.
