Informal Sector Research Articles

Enhancing Consumer and Family Economic Well-Being in ASEAN: The Role of Technological Advancement and Institutional Quality in Navigating the Informal Economy

This study aims to assess the role of technological advancement and institutional quality in mitigating the formal economy and fostering more inclusive economic well-being for families and consumers in ASEAN countries. This study employed panel data analysis using yearly data for the ten countries in ASEAN, spanning from 2008 to 2018. Findings indicate significant and diverse impacts of technological advancement on the informal economy. The study found that the interaction between technological advancement and economic growth strengthens the relationship between the informal economy across models. The higher economic growth in a country is associated with reduced informal economic activities, as reflected in the principles of modernization theory. The finding further shows the significance of institutional quality in shaping the informal economy. Strong institutional quality helps to create a structured environment that reduces informal economic activities, aligning with neoliberal theory. Governance quality, including the absence of violence and terrorism and the control of corruption, plays a role in mitigating informalities. The study’s primary contribution is its specific focus on the informal economy and the intricacies of ASEAN nations. The study also provides empirical insights into the behavior and determinants of the informal economy in ASEAN nations. Even though the study acknowledges limitations related to data availability and the challenges of quantifying the gig economy, it holds valuable policy implications.

Labor market adjustment to extreme heat shocks: Evidence from Brazil

Despite ample evidence on the labor productivity impact of heat shocks, little is known about how heat shocks affect labor adjustment over time. This paper uses administrative employer-employee linked data from Brazil to examine margins of labor market adjustment to extreme heat. Tracking workers over time and across job spells, I find that quarterly heat shocks increase the probability of formal manufacturing layoffs. In the medium run, there is limited intersectoral and interregional reallocation, as well as a significant failure rate to reallocate back to formal sectors, indicating job transitional costs. Finally, the employment impact of heat shocks is larger for workers in more routine manual task intensive, less abstract occupations.

A Study on Satisfaction of Tamil Nadu Government Free Bus Travel for Women in Madurai City

Abstract: In May 2021, the Tamil Nadu government launched a scheme that made public city and town buses (with certain caveats) free for women. While the rides are completely free (with no restrictions on the number of trips per day or month), the scheme is applicable only on ‘white board’ buses. The white board buses are what are known as Ordinary Bus Routes and represent the most inexpensive category of service that halts at all bus stops on a given route. The state government has provided an annual subsidy of Rs.1,200 crore to state transport undertakings to compensate for the fare box loss due to the scheme. The Tamil Nadu Chief Minister has extolled the scheme as an ‘economic revolution’, enabling women to join the workforce. In the eyes of many though, free transport remains a political gimmick. It’s not unusual to find citizens who question why travel should be free; and why just for women. A free travel scheme though is not unlike free health services or free education. Some services are so closely linked to ‘public good’, that the cost they incur is easily offset by the good that they achieve. Public transport is one of these. In general, women in India struggle to attain financial independence and a promising career. These challenges are multiplied in the case of women from underprivileged communities as they start with little to no education and a higher dependence on men. Much of this is culturally driven. They are also mostly unemployed; and when they do find employment it is within the unorganized sector, earning low wages. In the majority of Indian families, men tend to have access to the household vehicle, while women generally rely on public transport. Considering that the percentage of women undertaking paid work in India is only 21% while the global average is 47%, mobility becomes a life changing factor that could make or break a woman’s access to work opportunities. On the other hand, women who decide to not work outside the house, still rely on public transport to run errands and manage the household. This again incurs a cost.

A paradigm shifts in fintech and rural inclusion challenges in India

FinTech abbreviates as financial technology. India being a developing country having largest population in the world by surpassing the china recently in April 2023. Continuing with conventional method of transaction, most of the people of such a populous country are standing in queue waiting for their turn for financial services. Is it feasible to bear such a time and economical loss arises as opportunity cost due to standing in queue rather than doing some other activity? Therefore, it become need of the time to adopt the advance technological way of doing transactions. Since 2015, India has witnessing its most aggressive phase of financial inclusion initiative ever seen anywhere in the world which brings nearly 330 billion citizens into formal financial sector which still increases to make it a crucial topic for research. In this research, we analyses the rural FinTech literacy requirement with all available means and impact of FinTech facilities on E-commerce and banking sector along with intermediaries role by adopting case study approach. With huge potential for FinTech, India can be the global FinTech super power but challenge is acceptance of FinTech with pace of technological advancement as well as with challenges and security loophole protection.

Can financial development affect environmental quality in the presence of economic uncertainty and informal activities? Exploring the linkages in the middle-income countries

PurposeThe significance of this research lies in providing an understanding of how economic conditions, including financial development, informal economic activities and economic uncertainty, influence carbon emissions and tries to offer valuable insights for policymakers to promote sustainable development.Design/methodology/approachThe Panel-ARDL method is employed for a group of 30 developing countries from 1990 to 2018. This study analyzes the data obtained from the World bank, International Monetary Fund and World Uncertainty databases.FindingsBased on the empirical results of the extended model, an increase in GDP and energy intensity is associated with an 83 and 14% increase in carbon emissions, respectively. Conversely, a 1% increase in financial development and economic uncertainty is linked to significant decrease in carbon emissions (about 47 and 23%, respectively). Finally, an increase in the informal economy can lead to a negligible yet significant decrease in carbon emissions. These results reveal that financial development plays an effective role in reducing CO2 emissions. Moreover, while economic uncertainty and informal economy are among unfavorable economic conditions, they contribute in CO2 reduction.Practical implicationsTherefore, fostering financial development and addressing economic uncertainty are crucial for mitigating carbon emissions, while the impact of informal economy on emissions, though present, is relatively negligible. Accordingly, policies to control uncertainty and reduce the informal economy should be accompanied by environmental policies to avoid increase in emissions.Originality/valueThe originality of this paper lies in its focus on fundamental changes in the economic environment such as financial development, economic uncertainty, and informal activities as determinants of carbon emissions. This perspective opens up new avenues for understanding the intricate relationship between carbon emissions and economic factors, offering unique insights previously unexplored in the literature.

Aesthetic capital as a work strategy among precarious migrant coaches in China’s leisure industry

ABSTRACT This article explores how specific kinds of aesthetic capital enable urban-to-urban migrant workers to secure social mobility in the informal labour market of China’s leisure industry. Focusing on aesthetic capital accumulation and transference, it investigates how gym coaches, hip-hop dancers, and performers trade on their bodily assets and taste and seize opportunities to maximise capital when the fitness and leisure market creates occupational niches in metropolitan cities. It draws on ethnographic data from urban migrant coaches in the leisure industry in eastern and western cities in China. The findings reveal the dynamics of personal attributes, work strategies, and the increasing importance of aesthetic capital in the precarious economy. The findings enhance our understanding of how modern capitalism sustains interest in aesthetic and affective cycles.

Sustainable Redevelopment by Reuse and Recycle of C&D Waste in Mumbai

Solid waste that is generated due to demolition or alteration, any renovation work, structure repairing work is known as Construction and demolition waste (C&D). This waste is considered low risk waste but found in high volume. This waste can be used as resource for recycling and reusing. Due to increase in C&D waste environmental concerns and public health concerns are also increased. This causes necessity for recycling and reusing of C&D waste. If proper waste materials are managed, cleaned and sieved in industrial crushing plants materials can be reused. In spite of this demolition waste is dumped into dumping grounds of Mumbai. Mumbai Metropolitan Region (MMR) has nine municipal corporations which has area of 4,355sq.km. Under 74th Constitutional Amendment, Municipal Corporations in India are mandated to have solid waste management. In MMR all municipal corporations have centralized waste management that is dumped into nearby landfills. There are multiple players including informal sectors who are merging in managing C&D waste to decentralized the process. Due to increase in C&D waste in dumping grounds of Mumbai necessity to develop waste management plan is important. Working towards achieving this will help to reduce hazardous effect on humans and environment. This study highlights the need of reusing and recycling of C&D waste with proper management for sustainable development in city of Mumbai.

Addressing the Plight of Beauty Parlor Workers through Social Security Measures

Social security is bare necessity. While people working in organized sector are secured in many fronts, people working in unorganized sector lag behind the former. Federal and state governments in India have, however, created a variety of specialized initiatives, both protective and promotional in nature, to assist unorganized workers. The unorganized sector receives social security through publicly funded Social Assistance Programs, the Social Insurance Scheme, welfare monies from the federal and state governments, and other programs. In India, there are plenty of people employed in beauty salons. While some beauty parlours are organized and provide all sorts of security to their workers, some other parlours are purely unorganized and they don’t give priority on the security measures for their employees. Considering this, it is pertinent to ascertain the conditions of such workers and examine whether social security measures can help them fight out their plight. The study is based on qualitative primary data collected through in-depth interviews with some selected beauty parlor workers of Cuttack, Odisha. It is found that their lives are miserable without any social security measures. Thus, the social security measures extended to workers in organized sectors are needed to such beauty parlor workers who are there in an unorganized set up.

The Impact Of Fintech Innovations On Traditional Financial Institutions, Financial Inclusions, and Payment Systems – A Review Of Case Studies

Fintech (monetary innovation) advancements have been reshaping the monetary scene, altering the manner in which individuals access monetary administrations, go through with exchanges, and deal with their funds. It has fundamentally disturbed the customary monetary scene, it are conveyed and experienced to change the way monetary administrations. Fintech startups have pushed traditional financial institutions to change and improve their services in order to remain competitive with agile, customer-focused solutions. Fintech has revolutionized payment systems simultaneously by introducing digital payment methods and making cross-border transactions easier, reducing cash-based systems' reliance. Most importantly, fintech has increased financial inclusion by enabling individuals and small businesses to participate more actively in the formal economy by providing formal financial services to previously underserved populations via mobile platforms. While the extraordinary effect of fintech is apparent, policymakers and partners should address administrative intricacies and network protection dangers to guarantee supportable and comprehensive monetary environments. This article looks at the extraordinary effect of fintech on customary monetary foundations, installment frameworks, and monetary incorporation. By breaking down different literary works and contextual analyses, the specialist attempts to investigate how fintech has disturbed conventional practices, further developed productivity, and cultivated more noteworthy monetary incorporation around the world. IndexTerms - Fintech, computerized installments, monetary environment, network safety, monetary consideration, artificial intelligence, man-made consciousness, information security, risk.

GROWING AN INFORMAL DIGITAL MICRO-ENTERPRISE: THE ROLE OF INDIVIDUAL ENTREPRENEURIAL ORIENTATION AND SOCIAL CAPITAL

This research examines the effects of individual entrepreneurial orientation (IEO) on informal sector digital micro-enterprise growth in developing countries and the moderating role of networking social capital. The majority of EO research on company growth has focused on registered traditional SMEs and larger enterprises in higher-income markets. A total of 248 informal online micro-enterprises from Senegal were studied. The findings show that IEO has distinct effects on informal digital microbusiness development. Individual risk-taking boosts digital micro-enterprise growth, whereas inventive behaviour hinders it. Proactiveness does not seem to increase growth. Different social capital’s moderating effects on IEO dimensions and online micro-enterprise growth are also found. This study is one of the first to examine individual entrepreneurial behaviour that may lead to the growth of informal digital micro-businesses and the differentiated role of SC. It has also expanded business contextualisation to better comprehend IEO in informal online micro-enterprises outside developed countries.

Supporting Ageing Populations in Developing Countries: A Comparative Analysis of Pension Schemes and Policy Insights

The rapid growth of the elderly population is a major global demographic and social issue. Unfortunately, there is a shortage of pension plans and social security programmes for this population in developing countries, which has severe consequences for their quality of life and well-being. In this article, we aim to better understand the pension systems in developing country contexts such as Ghana, Pakistan, and Myanmar by reviewing official government materials (for example, pension reports) and the published literature to suggest relevant policy recommendations. We observed several policy implementation gaps and inequities in pension schemes for older people, specifically for informal and private sector workers. Considering the size of formal versus informal economies and the level of development index of each country, we suggest a wide variety of options for pension policies, financing, designing cash benefits, and pension payments to cover all older citizens. This article addresses the unmet needs of the elderly and their wider economic sustainability to ensure social justice and resource utilisation. Governments in developing countries should embrace and establish unique, inclusive, and friendly policies encompassing the informal sector to warrant older adults’ functional and social well-being with dignity and honour.

Socioeconomic impact and sufficiency of government financial support during COVID-19 pandemic: A retrospective study.

This study examines the socioeconomic impact of the COVID-19 pandemic and the sufficiency of government support. Based on an online survey with 920 respondents, the cross-tabulation and binary logistic regression results show: firstly, in terms of loss of income, male respondents are more likely to have a loss of income as compared to female counterparts, and secondly, among different categories of employment status, the self-employed respondents are the most vulnerable group, given that more than 20 percent of them experienced loss of income due to the COVID-19 pandemic. Moreover, respondents working in small-and-medium enterprises (SMEs) and the informal sector are more likely to face loss of income as compared to respondents working in other sectors of employment. Likewise, respondents without tertiary education level are more likely to have a loss of income as compared to respondents with university certification. The baseline results highlight the insufficiency of government financial support programs based on the perspective of Malaysians from different demographic backgrounds. As a policy implication, the findings could guide the State in formulating the right policies for target groups who need more assistance than others in the community.

Внешнеэкономические условия развития России: изоляция и переориентация

The paper considers the main factors of foreign economic relations dynamics of Russia in the last two years. Contrary to the original expectations, Western sanctions did not lead to the full isolation of the Russian economy. Rather, it experienced a reorientation towards countries, which do not support sanctions regime, as well as transition of a large part of foreign trade into an informal sector. The paper discusses main factors of the persistent integration of Russia in the world economy, as well as potential changes in the mid- and long-term perspectives.

Firms' sustainable and responsible innovation in Nigeria: Does informality play a role?

AbstractAt the turn of the millennium, developing countries face a twofold challenge. First, for reasons related to both intra‐ and inter‐generational justice, these countries need to follow sustainable development pathways. Second, they need to understand the deep principles underpinning informality, which is by now recognized as a structuring phenomenon of their economies. This paper sheds light on the relationship between these two goals by investigating how a Nigerian firm being formal versus informal affects its sustainable and responsible innovation (S&RI) activity. Using the entropy balancing methodology to analyze a novel database extracted from the Nigerian Business Innovation Surveys, we find that registered Nigerian firms engage in S&RI much more than those that are not. This suggests that, from the perspective of sustainable development, there should be no hiatus between recognizing the important role of the informal sector in the economy and promoting policies that give firms incentives to exit from it. By encouraging the registration of firms operating informally, these policies should help Nigeria in its transition to a sustainable market economy.

Determinants of Marketing of Handloom Products Across Heterogeneous Weaving Business Units: A Study of Rural Assam

Success in marketing plays an important role in the growth and extension of rural non-farm informal sectors. The present study made an attempt to understand the marketing success among diverse groups of handloom weaving business units and factors determining the marketing of handloom products through the lens of weaving business units in rural Assam. Besides descriptive and inferential statistics, multiple linear regression method was applied for the analysis of data. The results of the study show that the success of marketing in terms of sales volume and revenue was significantly higher among the master weavers. Factors like years of schooling of handloom weaving entrepreneurs, business experience, working hours, storage capacity, advance payment requirement, number of handloom competitors in village, transportation cost, communication expense, and proximity to market significantly influenced the marketing across heterogeneous weaving business units in the study area. Steps towards the improvement of rural market infrastructure and road connectivity by taking a slew of suitable policies by Central and state governments may allow the rural handloom weavers to get better access to the market, which in turn, may assist in the promotion of sales.

Self-initiated protection behavior based on Magna Carta of women: Women health workers, teachers, and minimum-wage earners in the workplace

The problem of violence in the workplace continues to expand and it casts a shadow on organizational environments all around the world. This phenomenon extends to different fields or sectors and is pervasive throughout a wide range of job environments, such as those in the healthcare industry, educational institutions, local and informal economies, and service industries. The purpose of this study was to analyze the actions of working women when their rights had been/will be violated. This quantitative study was conducted in Zamboanga Peninsula, Philippines among women in academe (n=121) and health institutions (n=39), and women of minimum-wage earners (n=42). Findings indicated that working women in the region tend to seek information outside their organizations when violence will happen; they also seek information when their rights once were violated. In some instances, they would only file a complaint when they feel discriminated against and when equal rights in the workplace are not well implemented. Notably, minimum-wage earners and health workers are more likely to file a complaint than teachers. The findings resonate with broader societal patterns wherein hesitancy to report workplace violations are deeply embedded. Such behaviors perpetuate gender-based violence and hinder the development of gender-sensitive and conducive workplaces. To deconstruct the gender and development (GAD) limitations, interventions need to extend beyond the present organizational policies to instill a culture of empowerment and safety for all individuals, fostering an environment conducive to open discussions, proactive conflict resolution mechanisms, and reliable report systems.

Impacts of Forced Immigration: The Venezuelan Diaspora and the Brazilian Labor Market

ABSTRACT This article estimates the impact of immigrant influxes on local labor markets, taking advantage of a natural experiment generated by a massive wave of forced migration of Venezuelans to Roraima, a state in northern Brazil, from 2016 onward. Estimates show that a 1% increase in the share of migrants in the state population due to immigration resulted in 1.1% higher earnings for native workers in the formal sector, 0.3% fewer hours worked weekly, and 2.3% higher wages. Results are confirmed by employing a synthetic control method.

Socio-Economic and Environmental Outcomes of Street Food Vending and its Sustainability in Selected Urban Areas of Kenya

Street food (SF) vending is a common livelihood activity in many urban areas globally. It is driven by a lack of employment opportunities in the formal sector and by the demand for cheap ready-to-eat food by urban residents. However, the trade is perceived to have adverse impacts on the urban environment and hence authorities seek to eliminate it from urban spaces. The purpose of this study was to assess the sustainability of SF vending in Bungoma, Kakamega and Busia urban areas in Western Kenya by examining its social, economic and environmental outcomes. The research design used was a cross-sectional descriptive survey. Proportionate sampling and simple random sampling were used to select respondents in each urban area. The sample consisted of two hundred and twenty-four respondents. Data was collected through questionnaires, observation checklists and photography. The findings show that SF vending met the food security needs of residents and also provided employment opportunities. However, the earnings were too low to meet the needs of vendors and their employees. Despite the low income, the trade also provided revenue for the county governments through the payment of various levies. Although personal hygiene was relatively good, workplaces were strewn with litter and waste disposal was poorly done. In order for SF vending to be sustainable in the long run, SF vendors need to be empowered through stakeholder engagement to increase their earnings to a level where it can meet their needs. They also need to adopt environmentally friendly waste disposal methods.

Responding to Covid-19 Pandemic: Policy and Governance Perspective to Reverse Migration in Uttarakhand

The coronavirus disease, commonly referred to as Covid-19, had engendered inadvertent and significant societal upheaval, widespread economic setbacks, and compelled the relocation of individuals on a global scale. Analogous repercussions have been witnessed in the context of India, notably exemplified by the mass exodus of migrant labourers from their designated areas of employment to their native regions, precipitated by a comprehensive governmental lockdown enacted to interrupt the transmission chain of Covid-19. This stringent lockdown exacerbated the plight of economically marginalised migrant workers, compelling them to endure financial precarity and minimal reserves while confined to their residences. Consequently, a substantial number of migrants, primarily employed in the informal sector, found themselves compelled to return to their ‘places of origin’ from their ‘places of destination’ as an imperative means of survival. The present article elucidates the characteristics and ramifications of this phenomenon of reverse migration, undertaking an evaluative analysis of India’s response to the challenges posed by reverse migration in the aftermath of the Covid-19 pandemic. Special attention is directed towards the policy and governance dynamics, with a particular focus on the hilly state of Uttarakhand, India.

Motivations of Bangkok’s Food Truck Owners during the COVID-19 Disrupted Supply Chains and High Inflation of 2020-2023: An Example of Resilience from Bangkok’s Informal Economy

This study considers the motivations of food truck owners and prospective owners in Bangkok during a difficult period both locally and globally. Plans for Bangkok’s future development were opaque. Inflation was rising rapidly, particularly food and energy costs critical to the industry. COVID-19 continued throughout the research. The aim was to stress-test motivation and commitment within the industry. The study asked participants what motivates them through qualitative and quantitative techniques, the former subject to thematic content analysis. Further, there was discussion with stakeholders and observation. Stakeholders particularly included training providers in the industry. Vendors requested more help so they could sustain themselves and prosper in the industry. Food trucks were of interest because of the relatively casual labour that found a place during COVID-19, although the number of trucks had declined before the pandemic. The study found that food truckers are still highly motivated and eager to help shape Bangkok’s food truck industry going forward and, thereby, the urban landscape and economy of the city. Demotivating factors suggested by the participants themselves focused on murky city planning, which became a major element in the study. Clearly, a transparent path forward must be negotiated between relevant stakeholders in determining the future development of the city.