Informal Labor Market Research Articles

Association between Socioeconomic Status and Psychological Distress among Rwandan Refugees in Zambia: a Gender Perspective

Urban refugees face several challenges which affect their emotional, social, and psychological well-being. This study utilised a quantitative cross-sectional design. The study assessed the association between socioeconomic status (SES) and psychological distress from a gender perspective among Rwandan refugees in Lusaka, Zambia. Two hundred and sixty-seven refugees between 18 and 65(M=33.99 years) participated in the study. The sample comprised men (47.9%) and women (52.1%) who were selected from Lusaka townships using purposive and convenience sampling techniques. SES was measured by assessing participants’ educational attainment, occupational status or employment, income, and financial support, whereas subjective psychological distress was evaluated using the General Health Questionnaire (GHQ-28). Framed within the feminist and the ecological systems perspectives, the study established an association between SES and psychological distress. The proportions of female participants in the lower education and unemployment categories and lower-income bracket were considerably higher than males in the same category. Similarly, the study revealed that the proportion of females (27%) with severe depression was higher than males (19%). However, the gender difference was negligible with other subscales such as the somatic symptoms, anxiety and insomnia, and social dysfunction. Bivariate associations revealed well-established gender differences, where women with low education and financial support reported higher levels of psychological distress. Multivariate analysis revealed that employment predicted a lower level of psychological distress in both men and women. The findings highlight that refugees’ access to employment is an essential factor in determining psychological well-being. Well-defined intervention strategies by government and humanitarian bodies are critical and should aim to empower refugees towards easy access to formal and informal labour market opportunities.

Informal social protection: A conceptual synthesis

AbstractVarious informal networks such as extended and immediate family, religious organizations, and NGOs assist a large segment of the neglected poor population worldwide by providing informal social protection. However, it is hard to locate a comprehensive definition of informal social protection that may help measure its aggregate benefits. Hence, it represents a considerable gap in the literature. To fill this gap, we used existing literature to define and devise a new framework to conceptualize and categorize informal social protection into three components: informal assistance, informal insurance, and informal labour market measures. By doing so, this paper makes critical contributions to the social policy literature as follows: First, the study synthesizes a sizeable body of research to provide a comprehensive definition and conceptualizes informal social protection in three components. The primary sources of the provision of three components of informal social protection are also presented. Second, this conceptualisation would help measure the concept of informal social protection and its attributes. Last, the proposed framework helps compare informal with formal social protection, which can further integrate the two forms of social protection. These contributions will respond to the repeated calls in the literature to advance the scholarship and develop meaningful questions for research on the role of informal social protection.

In search of developmental capitalism institutions:

How can we explain that some emerging economies grow faster than others? What explains the sustainability of their growth? Not all types of capitalism in emerging markets contribute equally to sustainable growth rates that undergird development. Comparative capitalism research on European economies temporary growth models aims to more properly grasp change in the varieties of capitalism approach. Adoption of the growth models in emerging markets capitalism research requires attention to integration into the global economy and to political coalitions, and the need to deal with the methodological challenges, given high labor market informality and political instability. This article seeks to make sense of changes in the components of successive growth models throughout a path-dependent capitalist variety, expand the growth model analytical framework by testing elements alongside demand (and supply) based on a case study of Brazil, and explore coalitions in economic reform to identify growth model’s social blocs. The article’s results unveil challenges to the employment of existing concepts and analytical framework; the need to build bridges between growth models and the political economy of development; and an exploratory assessment of growth model contributions to Brazil's postwar development. Thereof, in the long term, interest shifts of economic elites between liberal and non-liberal economic regimes suggest a fragility of repeated attempts to form a durable developmental coalition, a process dynamic that frays state-permeated capitalism positive externalities. It concludes that both path dependent developmental institutions, which hinder change, and growth instability limit the possibilities of designing institutional reforms out of the middle-income trap.

Wage Difference Between Formal Sector and Informal Sector Jobs; With Special Reference to the Labour Market in Sri Lanka

It is globally understood that wage-based employment structure and wages are a central aspects of the labour force at work. The informal sector is ranging to a broader concept that is difficult to define. The formal–informal wage gap is crucial to understand labour market informality, especially in developing countries with the large informal sectors. The basic model is taken from Mincer (1974), and the study is primarily based on secondary data. The new dummy variable of Job_type and an interactive term were incorporated into the Mincer earning function to analyse wage differences between formal sector and informal sector jobs. The study concludes that there is a wage gap between the a formal and informal sector. Moreover, if a person engages in formal sector job with good education qualification and good working experience, he will be entitled for a higher wage rate. Policies that promote education and equal opportunities for workers in both formal and informal sectors would improve earnings for many workers by increasing productivity and incomes.

Informal job search method and labour market outcomes: evidence from urban Chinese workers

ABSTRACT Using a representative sample of Chinese urban employees, we empirically study the impact of the utilization of informal job search through social networks on wage. We find a premium of initial wage associated with job referral, but the wage premium diminishes over tenure. We also find that the effect of job referral on initial wage reduces when human capital plays a more important role, or the recruitment process and the economic system are more market-oriented. Our findings are consistent with the learning theory that job referral can reduce information asymmetry between employees and employers at the beginning they meet, but the informational advantage diminishes over time as the employers know non-referred workers gradually.

Social Security Enrollment as an Indicator of State Fragility and Legitimacy: A Field Experiment in Maghreb Countries

State legitimacy and effectiveness can be observed in the state’s approach to delivering welfare to citizens, thus mitigating social grievances and avoiding conflicts. Social security systems in the Maghreb countries are relatively similar in their architecture and aim to provide social insurance to all the workers in the labor market. However, they suffer from the same main problem: a low rate of enrollment of workers. Many workers (employees and self-employed) work informally without any social security coverage. The issue of whether informal jobs are chosen voluntarily by workers or as a strategy of last resort is controversial. Many authors recognize that the informal sector is heterogeneous and assume that it is made up of (1) workers who voluntarily choose it, and (2) others who are pushed into it because of entry barriers to the formal sector. The former assumption tells us much about state legitimacy/attractiveness, and the latter is used to inform state effectiveness in delivering welfare. Using the Sahwa survey and discrete choice models, this article confirms the heterogeneity of the informal labor market in three Maghreb countries: Algeria, Morocco, and Tunisia. Furthermore, this article highlights the profiles of workers who voluntarily choose informality, an aspect that is missing from previous studies. Finally, this article proposes policy recommendations in order to extend social security to informal workers and to include them in the formal labor market.

Import Tariffs and Informal Labour Market: A Computable General Equilibrium (CGE) Analysis for Turkey

From the 1980s to onwards trade liberalization policies have been widely used in many countries. This process has significant impacts on many economic aspects one of which is on the labour market. However, the direction of the relationship between trade reforms and the labour market is controversial. This study aims to analyse the effects of a specific trade reform of import tariff changes on the formal and informal labour market for Turkey. For that purpose, we benefit from Computable General Equilibrium (CGE) Model that relies on nonlinear simultaneous equations. We construct an updated Social Accounting Matrix (SAM) which is compatible with our model. Our findings indicate that while there is a positive relationship between formal labour employment in total and import tariff rates, the negative relationship occurs between informal employment and tariff rates.

The Skills Space in Informal Work: Insights from Bangalore Slums

We develop a framework for mapping and analysing informal worker skills using microdata from nearly 1500 workers residing in the slums of Bangalore, India. Alongside econometric modelling, we employ machine learning techniques to explore relationships between skills crowdsourced from respondents. We find that informal workers rely on a host of task, language, personal and social skills. Further, we identify skill claims associated with both levels and stability of wage earnings. Our results include insights on gender disparities in skill claims, importance of English and computer literacy and the central role of personal and social skills in the Indian informal labour market.

‘If you don't migrate, you're a nobody’: Migration recruitment networks and experiences of Nepalese farm workers in Portugal

This paper analyses the networks, experiences and aspirations of Nepalese workers in Southern Portugal's farms and greenhouses. The main research objective is to analyse how recruitment networks, which supported the move of Nepalese to Portugal, were established and have rapidly consolidated. These networks impacted not only the increase of irregular migration flows but also the migration experience and vulnerability in the country of destination, including the passive acceptance of a certain degree of exploitation. By highlighting the perspective of the migrants themselves, we examine the impact on their lives, both of the migration experience and of paying large sums to smugglers, usually obtained through indebtment, to enter Portugal. We relate this impact to a context of immigration where the existence of a large informal labour market facilitates these workers being hired as irregular migrants. The study employed secondary data, in-depth interviews and participant observation. As well as migrants, greenhouse owners and recruiters were also interviewed for the study. The main finding is that the disposition of Nepalese to migrate, in which the pressure of the family plays a key role, tends to be reinforced by the action of the networks of recruiting agents. Secondly, the costs of migration and labour exploitation tend to be accepted by the migrants as a way to fulfil their social aspirations and economic necessities.

Barriers to Prisoners’ Re-Entry into Formal and Informal Labour Market

Aside from academics suggesting that low-physical-attractive prisoners may face difficulty reentering the labour market: permitting employers to access criminal history records aggravates the situation. The current study aims to alleviate this discrimination by generating more beauty premiums to prisoners through cosmetic surgery. The choice experiments (CEs) on hypothetical cosmetic surgery faces of 18 Thai male prisoners were conducted. In which every choice set, the respondents were required to make a tradeoff between beauty and criminal history records. The results show that cosmetic surgery generates beauty premiums to prisoners in both the formal and informal sectors with the odds ratio or increase of the utility of 1.75 and 1.754, respectively. Contrarily, the criminal history records result in discrimination to prisoners’ employments: decreasing job opportunities by 82.8% and 51% in the formal and informal sectors, respectively. The MWTP values show an additional salary to the cosmetic surgery groups for 2,600 baht approximately in both sectors. Besides contributing to the literature, the current study sheds light on the importance of physical appearance and criminal history records as one of the main barriers to prisoners’ re-entry. The findings could serve as new knowledge for policymakers to improve the success rate of prisoners’ reintegration.

Earnings gap between men and women in the informal labor market in Cameroon

AbstractThis paper investigates the extent of gender earnings gap among informal labor market workers in Cameroon. We have used the 2010 employment and informal sector survey, the Heckman two‐step bivariate selection model, and the Neuman–Oaxaca–Ransom decomposition framework to address these concerns. We find that, compared to men, women are more likely to make the joint decision of participating in the labor market and choosing informal work. Findings also reveal that among informal workers, male workers have an earnings premium over their female counterparts. Returns to informal labor market experience are solidly consistent in narrowing the gender earnings gap. Among the self‐employed workers, male workers also enjoy an earnings premium. However, when the inverse Mills ratio is decomposed, the overall and the self‐employed gender discrimination virtually disappears. Meanwhile, female wage earners enjoy a wage premium and have an unambiguous education‐based advantage over their male counterparts. The implications of these findings support the wisdom that promoting the human capital development of the girl child would play a vital role in alleviating gender‐based differentials by eroding sociocultural conventions and advancing women's agency.

Gender Differences in Earnings Rewards to Personality Traits in Wage-employment and Self-employment Labour Markets

In an extensive review of wage determination papers, it is concluded that the standard demographic and human capital factors explain little of earning differentials. Consequently, there is a growing interest among economists to include non-cognitive skills measured by personality traits in recent empirical literature to explain variations in earnings. In a bid to contribute empirical evidence to this strand of literature, this study examines the associations between the Big-Five personality traits (i.e., agreeableness, conscientiousness, openness, extraversion and neuroticism) and earnings, using the World Bank’s Skills towards Employment and Productivity (STEP) data on Ghana. The study employed regression techniques to estimate a series of semi-logarithmic wage equations that include demographic and human capital factors and the Big-Five personality traits to determine how important these factors are in explaining wage and self-employment earnings. Furthermore, the estimations of the wage equations are done separately for males and females to highlight any gender differences in the way personality traits contribute to earnings. Findings are largely consistent with the literature but uniquely demonstrate that in a power-distant culture like Ghana, where, traditionally, girl-child education has been relegated to the background, agreeable females, and not males, are rewarded in the formal wage employment labour market. However, in the informal self-employment labour market, conscientious males, and not females, are positively rewarded with higher earnings. These unique findings contribute to our understanding of the gender differences in the relative importance of non-cognitive skills in the formal and informal labour markets. JEL Codes: J31, J24

Covert resistance beyond #Metoo: mobile practices of marginalized migrant women to negotiate sexual harassment in the workplace

ABSTRACT Our study gives voice to socially marginalized women from the Global South whose struggles with sexual harassment are largely invisible in the #Metoo movement. Employing an ethnographic approach, this study examines the digitized resistance of Chinese rural–urban migrant women (n = 41) against sexual harassment faced in their workplaces. We adopt the lens of intersectionality to reveal the nuanced impacts of mobile communication practices negotiated in the context of gender, class, and the organizational structure across informal and formal economies. We find contrasting pictures of bottom-up disruption in the informal labor market and top-down transformation occurring in the modern factory. Migrant women working in the unregulated market restructured the existing patriarchal culture by deploying mobiles to establish collaborative groups for job information sharing. This mobile-mediated sharing enabled the rise of self-employed entrepreneurship, thus avoiding male intermediation in their livelihoods and thereby reducing the chances of encountering harassment. However, these benefits were uneven, with digitally-challenged women missing out. In contrast, migrant women employed in a registered factory with established rules actively negotiated top-down transformation of patriarchal culture. Female managers, in newly gained leadership roles, exercised their professional authority to encourage female workers to re-shape the discursive gender power of mobile spaces shared with male workers. Women actively confronted sexually provocative behavior of men on chat groups. We argue that subtle and covert mobile practices, in addition to visible and direct ones, allow for the construction of digitized female resistance culture as part of broader societal change influenced by mobile communication. We conclude with comments on the complexity and dynamism of mobile-mediated gender transformation in the context of rapid socio-economic development in the Global South.

Monetary and Fiscal Policy in the Presence of Informal Labour Markets: A DSGE Approach

In this paper, we investigate the transmission mechanism of monetary and fiscal policy shocks on inflation and output in the presence of an informal economy in Nigeria. To achieve this, a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model is modified to include informality in the labour and product market. The model is estimated using the Bayesian technique and the findings shows that in the case of a monetary policy shock, formal output tends to decline, while there is an expansion in informal output, at least in the short-run. The results also reveal that a fiscal policy shock brings about an initial decline in informal output. Hence, it is imperative for policymakers to strive to formalise the informal sector in order to ensure the effectiveness of monetary policy.

The Role of Informal Labour Market Conditions and Transferrable Competences on Informal Employments for Secondary School Graduates in Kigoma District, Tanzania

Secondary school graduate output in Tanzania has enormously increased without a proper placement plan in the labour market. Specifically, the paper delineates the differences in informal labour market conditions and transferrable competences between urban and rural secondary school graduates; presents an examination of informal employments for secondary school graduates; and denotes the impact of transferrable competences and informal labour market conditions on secondary school graduates’ informal employment. A cross-sectional study design was employed to collect quantitative and qualitative data. Descriptive results showed trading, fishing, transportation, mechanics, food vending, palm oil processing and farming to be among main informal employments in which secondary school graduates are engaged. Mann-Whitney U test showed that there were significant differences in the effect of explanatory variables between urban and rural secondary school graduates. Binary Logistic Regression analysis showed that 8 variables namely, informal labour market accessibility, financial capital, social networks, labour market legal framework, self-efficacy, interpersonal relation, entrepreneurship, and farming competences had significant influence on informal employments of secondary school graduates. The results from focus group discussions and key informant interviews were consistent with the findings from the quantitative data. It is thus concluded that informal labour market conditions and transferable competences have an influence on informal employment of secondary school graduates. Therefore, adjustments of informal labour market conditions and transferable competences could be an effective tool of expanding informal employments for secondary school graduates in the informal labour market. The findings emphasise on the need for alerting Local Government Authorities, labour offices, employment agencies, and Non-Governmental Organisations to adjust and re-organize informal labour market conditions and improve transferable competences for secondary school graduates, and hence, improve chances for the graduates getting informal employment. Keywords: Informal labour market conditions, transferable competences, informal employment, secondary school graduates. DOI: 10.7176/EJBM/13-2-05 Publication date: January 31 st 2021

Job Quality and Well-Being: Evidence from DR Congo

In the context of dualism of the labor market—informal sector labor market and formal sector labor market—this study assessed the impact of job quality on worker’s well-being. Using the first stage of the 2012 national survey data 1-2-3, preliminary results revealed that among 1443 employees, 85.44% were working in the informal sector whereas 14.56% in the formal sector. Given its multidimensional characteristics, the job quality was measured by six components such as job security, existence of union, training, employer’s support, working hours and promotion. In terms of contribution of each dimension, the Multiple Component Analysis was applied and based on the finding, we have selected the first three components with 46%, 39% and 15% respectively as a contribution to the construction of the job quality index. On the other hand, the well-being was measured by worker’s income and two classes— poor employee and non-poor employees—were created using the 2012 monetary threshold according to the place of residence. We estimated afterwards the logit model. Our results have revealed that the effect of job quality was significantly positive on worker’s well-being in both cases workers from Informal Sector and all workers irrespectively of their sector. In formal sector, the evidence of the significant impact of job quality was statistically rejected. The main explanation of this finding can be imputed to the job quality level which was already high in formal sector compared to informal sector. Furthermore, for all workers, this result was a consequence of the dominant effect of job quality on worker’s well-being in informal sector on that in formal sector. In view of above findings, there is a need of controlling and strengthening the job quality in informal sector for an increase in job security index by one unit, the probability that worker’s well-being increases is 0.38.

From Financial Literacy to Financial Capability: A Preliminary Study of Difference Generations in Informal Labor Market

This study aims to investigate whether financial attitude links financial literacy to financial capability. To make sound financial decisions, one essentially requires a certain level of financial literacy - knowledge and skill in finance. Even more effective is when one's financial literacy could be developed into financial capability. The samples comprised 342 individuals from informal labor in the South of Thailand. The stratified multistage sampling technique was utilized to select the respondents, while the interview questionnaires were used to collect the data. By using SmartPLS 3.0, the data analysis included descriptive statistics and structural equation modeling (SEM). The result revealed that the one with the highest debt was Gen Y compared to Gen B and Gen X. Considering financial literacy, financial attitude, and financial capacity across generations, it was found that Gen Y had the highest average score in financial literacy and financial capacity, higher than that of Gen X and Gen B. The impact of financial literacy on financial capability through financial attitude, it was found that the impact on Gen B was higher than that of Gen X and Gen Y. With the right financial attitude, people of all generations would be equipped with a higher level of financial capability.

Re-negotiating social reproduction, work and gender roles in occupied Palestine

This article uncovers the crisis of social reproduction in Occupied Palestine in the context of severe economic and political turmoil by specifically highlighting the ways in which impacts have been felt differently by men and women. It does so by considering the interactions of production and reproduction. The article confirms that, as a result of economic hardship, women, particularly married women, are increasingly participating in the formal and informal labor market. These women have been forced to renegotiate their domestic and caring responsibilities alongside paid work, within a context of very limited state or private sector provision of care services. While time-use survey findings suggest little change in men and women’s time-use between 1999/2000 and 2012/13 in general, qualitative interviews provide a more nuanced picture. Furthermore, the narrative that responsibility for managing care of children and elderly relatives as well as domestic work lies solely with the wife/mother is near universal. Respondents also did not voice demands for greater investment in child and elder care services by private firms or by the state, suggesting a strong individualization of responsibility for social reproduction in Occupied Palestine today. What remains to be seen is a) how representative these findings are for other groups, particularly poorer, rural families in Palestine and b) what the longer-term consequences of these changes might bring for societal gender norms in Palestine and in other contexts.

Informality and tax evasion. An experimental test among female entrepreneurs in Bogotá

The majority of informal entrepreneurs and workers in Bogota are women, most of whom do not have social security provision or job stability.This research investigates to what extent female entrepreneurs in the city of Bogota, Colombia, prefer to situate their business in the informal labor market. Some theorists as represented by De Soto, argue informality occurs due to a preference-based rational decision to avoid paying taxes, while others consider it to be primarily related to an “escape” from poverty as a unique option. The study used an experiment, featuring a tax evasion game targeting500 women participants, formal and informal entrepreneurs, from the city of Bogota. The null hypothesis of the study was tested using Chi-square (X2) and inferential statistical model at a 5% level of significance. The findings revealed that a significant difference between attitudes towards taxation in formal and informal female entrepreneurs in Bogota does not exist.

Locked down and locked out: Repurposing social assistance as emergency relief to informal workers

Abstract The COVID-19 pandemic presents a particular challenge to countries with high levels of labour market informality. Informal workers and their households are especially vulnerable to the negative economic consequences of the pandemic and associated lockdown measures, while the very fact of their informality makes it difficult for governments to quickly provide targeted economic relief. Using South Africa as a case study, we examine how an established social assistance system – not originally designed to support informal workers – can be re-purposed to provide emergency relief to these workers and their households. We examine how expansions of this system on the intensive margin (increasing the value of existing social grants) and extensive margin (introducing a new feasibly-implemented grant) can be used to mitigate this COVID-19-associated poverty. We compare the efficacy of the different policies by using pre-pandemic nationally representative household survey data to project how a negative shock to informal incomes can be mitigated by the different social grant measures, with a particular emphasis on poverty impacts. We find that an intensive-margin expansion of the existing Child Support Grant is complementary to the extensive-margin introduction of a new Special COVID-19 Grant, and that this combined policy intervention performs best out of the options considered. However conclusions as to this “optimal policy” are not simple technical determinations. We show that these conclusions are in fact sensitive to both unavoidable technical assumptions about how resources are consumed and shared within the household, as well as to normative value judgments about which populations to prioritise and how to value poverty reduction spillovers amongst the non-targeted group. While our approach helps identify a range of sensible policy approaches, there is no escaping the limits to our knowledge or the issue of normative goals – a finding likely applicable to a broad range of empirical policy analyses.