Date of Award

Spring 5-1-2026

Document Type

Thesis

Degree Name

Bachelor of Arts (BA)

Department

Economics

First Advisor

Sakshi Upadhyay

Second Advisor

Xiaoshou Hou

Abstract

The informal economy contributes substantially to the GDP of Sub-Saharan African countries. Building off work done by Nagler and Naudé in 2017, this paper analyzes the relationship between household idiosyncratic and covariate shocks and informal entrepreneurship entry and survival in rural and urban Nigeria. Using individual household-level panel data from the World Bank's Living Standards Measurement Survey and a logistic regression, this paper finds a strong positive correlation between household-level shocks and households' entry into informal entrepreneurship. Additionally, using a Poisson regression analysis, this paper finds that shock-induced entry, GDP growth, and education level have negative effects on enterprise duration, whereas urban living has a positive correlation. This paper also finds that married women, who persist longer when entry is not shock-induced, experience shorter periods of enterprise activity following a shock than single women do. This indicates that the informal enterprise economy serves as a fallback option to maintain income stability in the wake of financial hardship. Lastly, despite hypothesizing that women would have a higher rate of shock-induced entry, this paper finds the reverse to be true.

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