Formalizing employment in Africa’s small firms: Experimental evidence from Côte d‘Ivoire
Informal, low-quality employment in micro, small, and medium enterprises (MSMEs) remains a significant challenge in low- and middle-income countries. We present evidence from an impact evaluation of a light-touch business consulting program with a focus on employment formalization in Côte d'Ivoire. Using a randomized controlled trial with 448 self-selected MSMEs and a unique employer-employee dataset, we find that the intervention led to employment formalization, driven by greater minimum wage compliance (12 pp) and an increase in written contract provision (7 pp). The intervention’s financial implications were moderate and we show suggestive evidence that these improvements were possibly linked to selective formalization driven by employers' cost-benefit calculation for individual workers. Findings indicate that firms may have partially formalized previously informal payment streams.
Fietz, K., T. Lakemann, B. Beber, J. Priebe and J. Lay (2026), Formalizing employment in Africa’s small firms: Experimental evidence from Côte d‘Ivoire. The World Bank Economic Review (forthcoming)
DOI: 10.1093/wber/lhag003