Routes to the Informal Economy in New York's East Village: Crisis, Economics, and Identity

Abstract

This article looks at how individuals become involved in the informal economy. Among a group of self-employed workers in New York City's East Village neighborhood, I find three routes to the informal sector: constricted opportunities in the formal sector, individual economic motivations, or individual identity motivations. Most current literature focuses on the external pressures (e.g., unemployment) that force workers into the informal economy. However, I find that most workers are drawn to this economic niche as a way to explore a new work identity. Even among those workers who entered the informal economy because of reduced opportunities in the formal sector, most developed a commitment to the informal sector as a long-term career plan. I also discuss the opportunity structure of the East Village's informal sector. I consider barriers to informal sector employment and obstacles to using the informal sector as a conduit of identity change and transformation.