Tackling the Participation of the Unemployed in Paid Informal Work: A Critical Evaluation of the Deterrence Approach

Abstract

In this paper I evaluate critically the use of deterrence to tackle the participation of the unemployed in paid informal work. On the basis of the assumption that the paid informal work of the unemployed is low-paid employment conducted for unadulterated economic reasons, the aim is to deter these rational economic actors by ensuring that the expected cost of being caught and punished is greater than the benefit of participating in such activity. Using structured interviews with the unemployed in UK lower income urban neighbourhoods, however, I found that pure economic motivations do not predominate when the unemployed participate in this work. Instead, such work is principally used to help out others, or to cement or forge social networks, or both. In consequence, I argue that there is a need to couple deterrence with the provision of alternative coping mechanisms in order to eradicate paid informal work. I conclude by proposing several policy initiatives that could act as a substitute for such work.