Diagnosis of the Informal Economy in a Small Municipality in the South of Minas Gerais

Abstract

The phenomenon of informality has a relevant impact on the economies of the countries, especially in the economies of developing countries such as Brazil. Thus, this paper aims to make a diagnosis of the informal economy in Machado Town/MG. Therefore a qualitative survey was conducted with snowball method (Biernacki, & Waldorf, 1981), using structured interviews, which later was made a content analysis (Bardin, 1977). 107 businesses were identified working in the informal sector, which, in most cases, are the property of men, aged between 40 and 59 years, with low education, being it their only remunerative activity. Although they have an interest in formalizing, individuals cite the high costs of taxes and the business size make them to remain informal. It is concluded that the informal economy is a complex environment, possessing both positive aspects, such as making people's work more flexible so that they can have more time for the family, and negative ones, when they do not consider the incentive to growth and efficiency.