Informal Labor Market Research Articles

Migrants and Informal Casual Labour Markets

Internal migration in India is estimated to be at around 100 million people and short-term seasonal migration for work is estimated to vary between 80 and 140 million. Employers may benefit from the increase in the supply of labour, and middle-class households may benefit from the lower price of household services provided by the migrants and their families. Local residents with comparable skills to those of migrants may find that they have to compete for jobs in the labour market. Many regions implicitly differentially prioritize the interests of local residents and of migrants whilst filling vacant jobs, resulting in a tradeoff between welfare rights and openness to migration. Migrants take into account the tradeoffs of poor working conditions and unwritten and unenforceable contracts, with the higher income in the destination region, and all considered migrate. We provide a framework for understanding this socio-economic outcome. In many urban contexts, migrants and other low-skilled workers gather at some focal point such as a busy market place or crossroad in the morning and meet with potential employers who negotiate the type of work to be performed, the wage, and the number of hours that the worker has to work. Surprisingly, there has been a paucity of research on the employer–employee match in the daily urban casual labour market. Working days are usually long—between 12 and 14 h in many instances—and the wage and working conditions are usually negotiated. The market wherein the bargain takes place is a flexible labour market where workers can be replaced by the employer at a minimal cost to the employer. In most of such contracts workers report that they have been cheated and face harassment. The requirements for complete contracting are severe in this market. It is difficult ex ante to specify what constitutes a satisfactory performance of the contract (as it is difficult to record and measure performance), and accordingly, it is difficult to enforce the contract via a third party. This leads to opportunism as the employer holds up the worker by requiring further responsibilities such as longer hours of work to be undertaken that were not negotiated in the first place. We postulate a bargaining approach to unearth the role of regulation and the determination of wages and work conditions in the informal casual labour market.

Informal Employment and the Structure of Wages in India: A Review of Trends

The “alternative”, “atypical” or “informal” workforce has grown in developed and developing countries alike. One of the more recent evolutions of informal employment has been of informal employment within formal enterprises. In the interest of flexibility and cost‐reduction, many formal firms increasingly resort to hiring workers on a temporary or informal basis. Alongside, and perhaps, as a result of the persistence and pervasiveness of informal employment, issues relating to inequality have come to the fore. This paper is motivated by these two intertwining aspects of Indian labor market—informality and wage inequality. Using nationally representative sample data, the paper examines trends in wage inequality among various forms of informal workers, overlaying these findings with broader trends in inequality. Using a regression based inequality decomposition, the paper compares the sources of wage inequality across different employment groups and the reasons for differences in wage inequality.

WAGE DISCRIMINATION IN INDIA’S FORMAL AND INFORMAL LABOR MARKETS

The study examines the extent of gender- and caste-based discrimination among the formally and informally employed in India using the National Sample Survey Office (NSSO) Employment-Unemployment Survey (EUS) data for the four major rounds from 1999–00 to 2011–12. Oaxaca-Blinder decomposition results corrected for self-selection show wage discrimination to be significantly higher in informal employment compared to the formally employed. Similarly, caste-based discrimination is found to be lower compared to gender-based discrimination. The quantile decomposition results show discrimination to vary across the quantiles. Our results highlight the need for better regulation of the informal labor market in India.

Which people with traumatic paraplegia return to work?

This research aimed to investigate the factors that affect the return to work of individuals with traumatic paraplegia and to characterize post-injury work by means of a cross-sectional epidemiological study without statistical inference. The participants were patients at the Spinal Cord Injury Program of the Sarah Rehabilitation Hospital, Salvador, Brazil. The descriptive analysis used mean and standard deviation for continuous variables and proportions for categorical variables. Male predominated among the 42 respondents, with a mean age of 36 years. Mean schooling years was 9 years. Twenty-two respondents returned to work, 21 of which were in the informal labor market. Mean time to return to work was 3 years. The main reasons for returning to work were need for money, personal satisfaction and contact with other people. In this study, returning to work is relevant for adults with spinal cord injury, providing them with higher income and better quality of life. We also noted the importance of higher education level for the successful return to work. Therefore, it is necessary to improve the return to work process, the qualification and professional rehabilitation of these workers.

Labour Relations and Labour Structures in Mediterranean Capitalism. Caporalato and Romanian Migration in the Southern Italian Agriculture

Abstract In this paper I will examine the structural and social features of the gang-mastered labour system (caporalato) as it appears in the agricultural production process in Italy. I will discuss the functions of this type of labour regime through an analysis of the role (Romanian) migrant labour plays in the Italian agriculture process and its need for the (informal) labour market mediation in agriculture. My aim is to critically map the function of caporalato within a production circuit that starts with the low price imposed on agricultural goods, and ends up at the top of the production process, namely with the food empires and corporate retail and distribution chains. The economic constraint for an ever cheaper labourforce, and its social context, will guide our critique of caporalato

Gender Determinants of Informal Labour Force Participation in Cameroon: The Role of Education

One of the most salient features of developing countries is the preponderance of the informal sector. This sector employs more than 90% of the labour in Cameroon. The main objective of this paper is to empirically examine gender factors that determine informal labour force participation in Cameroon with particular emphasis on the role of education. In order to achieve this objective, the paper used probit model on data collected from the second Cameroon Labour Force survey. Three models were estimated for the two gender sub samples and the total sample. Results from the data analysis reveal that education plays a very important role in explaining men and women decision to join the informal labour market. More precisely, at lower level of education, notably the primary level, women were more likely to join the informal sector of employment. At secondary level of education, women remained more likely to participate in the informal sector whereas the situation reverses for men. Another gender difference highlighted in the study is the fact that with the marital status: married men were more likely to join the informal employment unlike married women. Other factors significantly influencing informal Labour Force Participation include religion, age and urban zone of residence. Keywords : Gender, informal labour force, education, probit, JEL Classification : B30, B53, C11, C23, O10, O40 DOI : 10.7176/JAAS/54-04 Publication date : April 30 th 2019

Proximity, embeddedness and evolution: The role of networks in the development of the informal female labour market for glove manufacturing in Gaozhou county, China

By introducing geographic social capital, this paper highlights the role of social and spatial proximity in facilitating the spatial agglomeration of the informal female labour market for glove manufacturing in Gaozhou. It examines the town-village nodes within the network, interacting with pre-existing rural conditions to display discursive uncertainty. Further, it focuses on the agency manifested by different actors within the multi-layered nodes, capturing the resources embedded in the network in the specific geographic context or milieu.The results suggest that spatial proximity promotes social proximity, but also generates spatial lock-in, which can be avoided by becoming a ‘focal actor’ or a ‘boundary spanner’. The boundary between the ‘core’ and the ‘periphery’ has become blurred. The social value of skilled workers located near the top of the network has changed. The node of village farmers at the end of the network has become increasingly important; they are perceived to be a ‘reservoir’ of labour resources. The survey results show a compound social network of establishments and workshops that mainly feature an informal network within the specific context of geographical localities. ‘Hybrid spaces’ discovered through ethnographical immersion investigation embody the spatial embeddedness of social relationships and cultural constructions in the glove manufacturing workplace, reemphasizing the importance of people as a resource in the sustainability of rural development.

Progressive tax policy and informal labor in developing economies

Governments in many industrializing democracies face difficult policy trade‐offs. Liberalization and informality have placed electoral pressure on them to expand noncontributory social spending. However, governments in developing democracies face constraints when attempting to finance this expansion. In some countries, the informal labor market is very large, thereby undermining the revenue that can be collected through income tax. We argue that this has given rise to a paradoxical situation. Left governments in developing democracies with large informal labor markets have a strong electoral incentive to expand welfare regimes to previously excluded outsiders, but to fiscally underwrite this expansion, they have increasingly been forced to fund their redistributive strategies via a regressive policy instrument, indirect consumption taxation. We examine this argument for a sample of 17 Latin American countries between the years 1990 and 2016. Our results suggest that labor informality forces left governments to turn to indirect taxation.

An Analysis of Informal Caregiving and Labor Market Outcomes

An Analysis of Informal Caregiving and Labor Market Outcomes

Upotreba analize masovnih podataka za unapređenje efikasnosti naplate poreza u Poreskoj upravi Republike Srbije

Tax evasion poses a major problem for the overall business environment in every economy - it endangers competition, reduces resources for budgetfunded public goods and services, and public policies enforcement as well. Moreover, fundamental human rights are denied in an informal labour market. The reform of the Tax Administration of the Republic of Serbia, which has been implemented since 2015, has already contributed to the increase in efficiency of tax collection over the past years; however, there is still significant room for improvement of tax collection, especially individual income taxes, social security contributions, and value added tax. One of the pillars of the Tax Administration Reform refers to the improvement of the analytic function regarding risk management aiming to make the tax control function more efficient, and raise the awareness of voluntary tax declaration. The paper presents the first results of a joint scientific-research project between the Tax Administration and the Faculty of Sciences of the University of Novi Sad, aiming to develop the algorithms for detecting the risk of tax evasion by using advanced methods in big data analytics and the development of artificial intelligence with the help of machine learning. The presented indicator is based on the weighted norm distance between income distribution in a legal entity and the average income distribution in the business sector which it operates in. The results show the sound performance of the developed indicator. In addition to improving the efficiency of field control, the approach is also going to enable an affirmative approach to those taxpayers who are classified in a low-risk category in terms of tax evasion. Furthermore, additional positive effects are expected based on higher self-reporting of risky categories due to higher probability of being a subject of a field control and detecting tax evasion.

Determinants of Informality and Monetary Outcomes of Informal Labour Market in Haryana

Determinants of Informality and Monetary Outcomes of Informal Labour Market in Haryana

The Effect of Refugee Integration on Migrant Labor in Jordan

AbstractBefore the Syrian civil war, Egyptians were the single largest migrant labor community in Jordan. Labor market pressures and changes to the Jordanian work permit system have resulted in the increasing vulnerability of Egyptian labor, who have been the primary labor force on Jordanian farms and construction sites since the late 1970s. Using new data from the 2015 Jordanian census, the 2010 and 2016 Jordan Labor Market Panel Survey, and field interviews conducted in Jordan from 2014 to 2018, I show that higher concentrations of Syrians at the subdistrict level are associated with higher rates of informal labor market participation for Egyptians. Furthermore, higher proportions of Syrians do not correlate with negative impacts on the formality or household wealth of Jordanian citizens, suggesting that Syrian labor does not directly compete with the Jordanian labor force. Given the importance of supporting host communities during refugee crises, this analysis sheds light on how mass forced migration affects other vulnerable segments of the migrant labor force in the Global South.

Flexicurity of the Labor Market through the Formal/Informal Duality, in the Context of Globalization

The new stage of globalization, marked by deeper integration of work, creates new opportunities, both in terms of economic growth and job creation, but at the same time creates new challenges and problems in the labor market, such as: increasing labor market flows, exposing jobs to increased global competition and segmenting the labor market in formal and informal terms. It is known that the main feature of the informal labor market, whether we are talking about a developed economy or a developing economy, is flexibility, and the essential feature of a formal labor market is security. In any labor market, there is an increasingly fierce struggle between employers, who want more flexibility and employees, who want more security. Thus, was born the concept of "flexicurity". This paper aims to approach the flexicurity of the labor market through the formal / informal duality in the current context of globalization and to show the optimal combination of job flexibility and the security of the workers, who occupy those jobs.

An analysis of informal work: The case of SubSaharan scrap metal waste pickers in the city of Barcelona

Object: To analyse the framework within which the informal labour market operates and the social implications of this market by conducting a case study of sub-Saharan scrap metal waste pickers – chatarreros – in the city of Barcelona. Design/methodology: The study compares and contrast theoretical findings drawn from the literature about informal work and the social and living conditions of Barcelona’s chatarreros . Our primary data are collected from twelve interviews (ten with scrap metal waste pickers and two with neighbourhood leaders) and from ethnographic fieldwork conducted between February and August 2013. Contributions / results: Barcelona, in common with many other cities in the northern hemisphere, has experienced a growth in informal work directly linked to the tourism sector, the city’s main economic activity. This growth was especially marked in the Great Recession (2008-2015). Traditionally, informal workers have been systematically ignored, recognition being saved solely for those legally or formally employed. But the major economic changes of the last 20 years have led to the transformation of labour markets and to the segmentation and precarisation of work, and with it the growth of the informal sector. Here, we analyse three elements that are critical for understanding this sector: recognition of work, its capitalisation and the relation between the individual and work. Limitations: This study, for reasons of space, limits itself to an examination of one group of informal workers in Barcelona, namely the chatarreros ; however, there are many other groups that are worthy of study, including, the city’s street vendors, and street artists: buskers, living statues, caricaturists, etc. Originality/added value: The study serves to fill the gap in knowledge regarding the reality of informal work and its social consequences. Specifically, it facilitates understanding of the theoretical concept of informality, illustrating, by means of a case study of informal recyclers or scrap metal waste pickers, the economic and social condition of informal immigrant workers characterised by poverty, discrimination, disembeddedness and subsistence.

How do Regulated and Unregulated Labor Markets Respond to Shocks? Evidence from Immigrants During the Great Recession

We study wage adjustment during the recent crisis in Italy using a unique dataset on immigrant workers that includes those employed in formal and informal sector. We find that before the crisis immigrants’ wages in the formal and informal sectors moved in parallel (with a 15% premium in the formal labor market). During the crisis, however, formal wages did not adjust down while wages in the unregulated informal labor market fell so that by 2013 the gap had grown to 32%. The difference was particularly salient for workers in occupations where the minimum wage is likely to be binding, and in “simple” occupations where there is high substitutability between immigrant and native workers. Calibrating a simple partial equilibrium model of spillovers between formal and informal markets, we find that less than 10% of workers who lost a formal job during the crisis move to the informal sector. We also find that if the formal sector wages were fully flexible, the decline in formal employment would be in the range of 1.5–4.5%—much lower than 16% decline that we observe in the data.

Illegality in the informal labour market: findings from pilot research on child labour in Istanbul

Children consist of one-third of the population of Turkey that has the second highest level of child poverty among the OECD countries. Child labour is widely observed, especially in the poor famili...

Explaining and tackling the informal economy: a dual informal labour market approach

PurposeTo transcend the long-standing debate regarding whether workers are driven into the informal economy by either their involuntary “exclusion” or voluntary “exit” from the formal economy, the purpose of this paper is to propose and evaluate the existence of a dual informal labour market composed of an exit-driven “upper tier” and an exclusion-driven “lower-tier” of informal workers, and to explore its policy implications.Design/methodology/approachTo do so, data are reported from a 2015 survey of the informal economy conducted in South-East Europe involving 6,019 face-to-face interviews in Bulgaria, Croatia and FYR Macedonia.FindingsIdentifying a dual informal labour market with three exit-driven informal workers for every exclusion-driven informal worker, a multinomial logit regression analysis reveals that, compared to the exclusion-driven “lower tier”, the exit-driven “upper tier” is significantly more likely to be populated by the formally employed, retired and those not struggling financially. Participation is not affected by the perceived severity of penalties and likely risks of detection, but relative to those in the exclusion-driven “lower tier”, there is a significant correlation between those doing so for exit rationales and their lack of both horizontal trust and vertical trust in formal institutions.Practical implicationsThe outcome is a call to transcend the conventional deterrence approach of increasing the penalties and risks of detection. Instead, to tackle those driven by exit rationales, tackling both the lack of horizontal trust that other citizens are operating in a compliant manner and the lack of vertical trust in formal institutions is advocated. To tackle exclusion-driven informal workers, meanwhile, a focus upon the macro-level economic and social conditions which lead to their participation is required.Originality/valueThis is the first paper to empirically evaluate the existence of a dual informal labour market and to evaluate its policy implications.

Impact of Shocks on Labour and Schooling Outcomes and the Role of Public Work Programmes in Rural India

The effectiveness of the National Rural Employment Guarantee Scheme (NREGS) on rural labour market dynamics in India has been widely debated in the literature. However, the impact of the NREGS on non-agricultural labour market and children schooling outcomes in reference to exogenous rainfall shock is unclear from the existing literature. This paper exploits the Indian National Sample Survey and rainfall measures from the precipitation archive of the University of Delaware to investigate the role of the NREGS in the labour market and schooling outcomes of children during shocks. Using a difference-in-differences methodology, we focus on disaggregated shock specification and find a shock-cushioning pattern for the NREGS during negative shocks. However, there is an excess demand for labour during positive shock periods resulting from exposure to the NREGS. The implication is that the excess informal labour market opportunity translates to a reduction in school engagement for children. These findings summarily distinguish the role of the NREGS during positive and negative shocks respectively.

The subjective well-being of day labourers in South Africa: The role of income and geographical location

Background: The informal economy in South Africa provides employment to large numbers of people who would otherwise have no opportunity to earn a living. Yet informal activities, such as day labouring, generate highly uncertain returns. Although it seems reasonable to conclude that day labourers would be dissatisfied with their lives, this is not necessarily the case as several factors contribute to people’s subjective well-being. Aim: This study is in response to a call for more research on the subjective well-being of marginalised groups in South Africa’s informal labour market. Setting: The day labour market in South Africa, whose members congregate at hiring sites hoping to be picked up by passers-by in need of temporary, casual workers. Methods: Using Sen’s Capability Approach, the study builds on earlier research conducted on the general well-being of day labourers in South Africa, with specific focus on their subjective well-being and geographical location. The results from a countrywide survey of 3830 day labourers were used in a regression analysis to compare the subjective well-being among day labourers across the nine provinces of South Africa. Results: There are statistically significant differences in the well-being of day labourers across the nine provinces. Economic variables play a role in both objective and subjective measures of well-being, while attitudinal and comparison variables are significant for the objective and subjective measures, respectively. Conclusions: Although they have to operate in harsh conditions, day labourers in South Africa display agency by choosing to migrate to richer provinces in search of greater economic opportunity and reward. However, these potential gains are often negated by increased levels of competition and thus depressed wage levels. How to nurture marginalised groups’ abilities to exercise agency and take more control of their lives represents fertile ground for researchers in future.

An Empirical Investigation of the Factors Influencing Formal and Informal Employment in the City of Asmara

This study investigates the factors influencing formal and informal labour market in Asmara, the capital city of Eritrea. The findings reveal that variables such as age, gender, education and birth place influence formal and informal labor market of the city. The chances for young people getting jobs in formal are low relative to older people. Higher educational level is related to securing jobs in the formal sector. Regarding gender males have more chances in the formal sector than females. People from Maekel/Central Region (townships surrounding Asmara) have higher chances to engage in self-employment. Generally, the results reveal that the labor market in Asmara show varied characteristics.