Informal Sector Research Articles

The informal economy and the reach of policy interventions: Evidence from the COVID‐19 lockdown in India

The informal economy and the reach of policy interventions: Evidence from the <scp>COVID</scp>‐19 lockdown in India

Analysing the heterogeneity in working conditions of migrant informal workers in China: a test of the WIEGO model of informal employment

This paper sheds light on the internal heterogeneity within the informal economy by examining the working conditions of migrant informal workers in China. It presents the first attempt to test the WIEGO model on the relationship between informality, income, poverty and gender. Based on 107,020 samples of informal workers from the 2017 China Migrants Dynamic Survey (CMDS), economic, social and occupational health components of working conditions of migrant informal workers in five employment-status tiers are analysed. The results show the significant heterogeneity within informal workers in terms of their income, working intensity, labour contracts, social security, union and community support. The relationships between the informal employment tiers and income, poverty and gender show a pattern that is not fully in line with the WIEGO model, suggesting the complexity and plurality of heterogeneities in informal employment. The paper concludes by calling for research on regional varieties of the heterogeneity in informal employment worldwide to better understand the unfolding of the inequality-informality nexus in specific contexts.

Informal Incentives and Labour Markets

Abstract This paper investigates how labour-market tightness affects market outcomes if firms use informal, self-enforcing, agreements to motivate workers. We characterise profit-maximising equilibria and show that an increase in the supply of homogeneous workers can increase wages. Moreover, even though all workers are identical in terms of skills or productivity, profit-maximising discrimination equilibria exist. There, a group of majority workers is paid higher wages than a group of minority workers, who may even be completely excluded. Minimum wages can reduce such discrimination and increase employment. We discuss how these results relate to empirical evidence on downward wage rigidity, immigration, the gender pay gap, and credentialism.

Alguém se meteu no meio: modelos de intermediação digital do trabalho doméstico no Brasil

Informality is a reality for three-quarters of domestic workers in Brazil who, without a formal employment relationship, are not protected by the legal guarantees established since 2013. This lack of legal protection is exacerbated by the emphasis on entrepreneurship promoted by a growing number of digital platforms offering domestic work intermediation. In this article, we examine the structural standards of digital intermediation companies for domestic work in Brazil. Four representative platforms (GetNinjas, Parafuzo, Helpty, and Crafty) were analyzed. Our research corpus consists of their websites and applications, their terms of use, as well as journalistic articles and complaints from workers and clients on the website Reclame Aqui. The results are presented in three parts: (i) the history and general characteristics of each platform; (ii) their content organized into four categories of analysis (marketing, hiring, remuneration, and reputation systems); and (iii) the accounts of clients and workers on the Reclame Aqui website. The study found that digital intermediaries for domestic work present complex challenges for workers, as they amplify existing risks in the dominant labor model, such as intense subordination, economic dependence, lack of transparency about the value of their work, and exclusion from legal labor protection, whose recent expansion has not resulted in effective change. The study also suggests that this intensification of risks increases directly with the degree of intervention by the digital intermediary in the client-worker relationship.

Determinants of Digitalization in Unorganized Localized Neighborhood Retail Outlets in India

The increase in digital disruptions and changing preferences of different stakeholders has led to digital adoption in all hierarchies of business ecosystem. This study focused on the identification of the determinants of digitalization in unorganized small, localized retail outlets (Kirana stores) of an emerging economy. A theoretical model was constructed with certain modifications based on technology adoption models such as Technology Acceptance Model (TAM) and Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) to study the impact on business performance in general and as an effect of pandemic. A survey of 285 Unorganized Localized Retail Outlets Stores from different regions of India was used to validate this theoretical model, and structural equation modeling was then further employed. The findings underscore that cost, compatibility, perceived ease of use, and perceived usefulness significantly affect the intention to digitalize. By addressing the post-pandemic impact of digitalization within an unorganized sector in an emerging economy, this study adds to the scant literature that exists in this context.

Understanding the Dynamic Linkages: Inflation, Real Balances, and Their Impact on Economic Growth in ECOWAS

This study examines the dynamic relationship between growth, inflation, and real money balances in the Economic Community of West African States (ECOWAS). We apply a new approach by extending comprehensive econometric methods so that monetary dynamics can be better understood in the West African sub-region. The study obtained data from the World Bank from 2006 to 2021 and covered 15 countries. For robustness checks, we estimate dynamic ordinary least squares and fully modified ordinary least squares. These findings reveal the existence of a significant cointegration relationship between growth, real balance, and inflation. Furthermore, this study found that real balance has a positive long-run dynamic impact on growth. Likewise, there is a short-run positive impact of money and inflation on growth. We contribute to the literature on the money-growth nexus by focusing on West Africa, which faces macroeconomic vulnerabilities due to structural imbalances. These findings have policy implications for central banks and the Fiscal Agency. Central Banks must collaborate to reduce money in the informal sector, while Fiscal Authorities must control inflation collectively.

Shadow Economy: Determinants and Its Impact on Foreign Direct Investment

The shadow economy poses a significant threat to government revenue and the effectiveness of economic policies. This paper investigates the causes of the shadow economy and its influence on foreign direct investment (FDI). Our study employs the currency demand approach, a component of the indirect method, to identify the determinants of the shadow economy in a dataset covering 105 countries from 2001 to 2017. These countries are categorized into four income groups: high-income, upper-middle-income, lower-middle-income, and low-income. Parameter estimation is conducted using the Generalized Method of Moments (GMM) model, with robustness tests incorporating reference estimates from Partial Least Squares (PLS) and Fixed Effects Model (FEM). Our findings indicate that a higher GDP and lower interest rates are associated with reduced shadow economy activity. Elevated market interest rates increase the cost of funds in the informal sector, discouraging engagement in shadow economic activities due to reduced profitability. Furthermore, higher tax revenues correlate with intensified regulatory enforcement, increasing the risks associated with shadow economy involvement. A larger workforce and lower unemployment rates similarly diminish shadow economy activity. In the context of foreign direct investment (FDI), the shadow economy positively affects FDI flows when formal institutions, including legal frameworks, property rights protection, and regulatory systems, are either weak or overly burdensome. In such scenarios, economic actors may opt for informal channels like the shadow economy, offering a flexible and cost-effective alternative to the formal sector, a crucial consideration for foreign investors.

Digital Infrastructure Construction and Improvement of Non-Farm Employment Quality of Rural Labor Force—From the Perspective of Informal Employment

The pivotal role of digital infrastructure as hardware support for fostering economic efficiency in the digital economy is widely acknowledged. However, it begs the question, can the development of digital infrastructure also advance social equity, particularly concerning horizontal equity, as exemplified by the quality of non-farm employment among rural laborers, which serves as a barometer for the fairness and inclusivity of the social opportunity landscape? This article delves into the ramifications of digital infrastructure development on the quality of non-farm employment for rural laborers. Initially, it conducts a theoretical exploration of the impact and mechanisms of digital infrastructure construction on non-farm employment quality within rural labor sectors, drawing upon the Todaro model framework and existing scholarly discourse. Subsequently, by integrating data on digital infrastructure construction at the prefecture-level city level with four periods of the China Family Panel Studies (CFPS) data spanning 2014 to 2020, employing various endogenous treatment methods including two-way fixed effects, sensitivity analysis, and instrumental variable techniques, it empirically tests and analyzes the internal mechanisms. The findings reveal that digital infrastructure construction plays a beneficial role in enhancing the quality of non-farm employment for rural laborers, encompassing both subjective perceptions and objective circumstances of non-farm work. Notably, it is observed that digital infrastructure construction significantly fosters improvements in the quality of informal employment among rural laborers, with notable disparities across gender and skill levels. This discovery exerts a positive influence on advancing the sustainable development of the labor market. Specifically, female rural laborers necessitate higher skill proficiency and educational attainment to attain commensurate benefits as their male counterparts. Moreover, caution is warranted regarding the potential for digital infrastructure construction to exacerbate existing power differentials and widen socioeconomic disparities through the perpetuation of the digital divide.

Analysis of the relationship between unregistered employment and occupational accidents in Turkey.

Occupational accidents are anticipated to decline when unregistered employment declines because of more regulated working conditions, inspections, and opportunities for legal protection. In the study, the accuracy of this presumption was examined. This study aims to examine how to protective legal regulations generate a relationship between occupational accidents and informal employment such as the Occupational Health and Safety Law in Turkey. In the research, which was structured within the framework of the quantitative method, various levels of relationship chains were created between informal employment and occupational accidents using correlation and slope calculations. The official data set was created using secondary data from the Turkish Statistical Institute and the Social Security Institution. It has been determined that the low positive correlation (r = 0.166) between unregistered employment and occupational accidents in 2008-2012 (pre-legislation period) in Turkey changed to the medium-negative direction (r=-0.602) in 2013-2020 (legislation period). While the assumption that unregistered employment would decrease in the first period was confirmed, the hypothesis was falsified by the increase in occupational accidents despite the decrease in informality in the second period. This study is unique because it shows that in a developing country where unregistered employment is high, the protective regulations for work accidents do not reflect a decrease in the number of work accidents in the short and medium term.

Gender Disparities and Social Responsibilities as a Barrier to the Adoption of E-Commerce for Women Entrepreneurs of India in the MSME Sector

Gender-based obstacles that prevent women from beginning and expanding their enterprises include unequal distribution of family and domestic duties, restricted mobility, discriminatory property, marriage, and inheritance laws and/or cultural traditions. When it comes to accessing resources such as commercial credit from formal financial service providers, more lucrative markets rather than traditional local markets, technology and information to launch and expand their businesses, national incentives in small enterprise development through gender-blind private sector development, fiscal policies and legislation, and training and education for small enterprise development, women entrepreneurs are less privileged than men due to these factors combined with social exclusion based on gender. In the informal sector, women entrepreneurs running micro and small companies significantly improve the financial security of their families and communities. They have little chance of creating successful firms as long as they are not covered by SME development laws and initiatives. In order to address these issues, this research paper takes a development and rights-based strategy that strives to meet the real-world needs of female entrepreneurs, eliminate the political, legal, and sociocultural obstacles to their success, and promote an atmosphere that is supportive of both gender equality and business growth.

The Impact of Tax Legislative Disruptions on the Increase of Informal Economic Activities in Egypt

The study examines how legislative instability in tax laws affects the growth of informal economic activities in Egypt. It suggests that unclear or unsustainable tax regulations drive a shift towards the informal sector, fueled by benefits like tax evasion and reduced compliance costs. To encourage voluntary integration, the study proposes measures such as transparent tax laws, awareness campaigns on tax compliance benefits, and simplification of procedures. It advocates for policymakers to prioritize creating an environment conducive to integration over punitive measures. By fostering a fair tax system and addressing underlying factors driving informality, Egypt can boost tax revenue, ensure fairness, and promote sustainable growth. Employing a descriptive-analytical approach, the study analyzes secondary data from official reports, academic literature, and relevant publications. This method allows for a systematic examination of tax legislative disruptions' impact on informal economic activities. It facilitates understanding the dynamics of tax regulations and their effects on informality by analyzing diverse information sources. This approach ensures reliable insights into the relationship between tax laws and the informal economy in Egypt.

Gig Economy Insurgency

Militant groups delegate operations to contingent, short-term, and freelance agents. Informal and ad-hoc employment patterns have wide-reaching consequences, yet the literature lacks a systematic vocabulary and framework to analyze these practices. Using primary and secondary sources, I introduce a descriptive typology of informal employment patterns in militant groups. This contributes to scholarship and practice by establishing a basis for a systematic comparison of variation in militant employment models, particularly highlighting how these practices can have far-reaching implications for conflict and post-conflict settings. Case studies of informal militant hiring practices in Afghanistan, Iraq, and Syria support the typology.

Voluntary Contributions to Pension Schemes: A Study Among Actors in the Informal Economy in Tanzania

The research delves into the participation of informal economic actors in voluntary contributions to pension schemes. It sheds light on the difficulties faced by the Social Security Fund in reaching out to informal actors regarding membership and voluntary contributions. The study investigates the operations and strategies employed by informal social organizations, such as the bodaboda association, food vending network, and fishing group, to encourage members to contribute voluntarily. Through qualitative methods, interviews with pension scheme participants were conducted to comprehend the initiatives aimed at including excluded individuals, particularly those engaged in the informal economy. Following the NSSF Act 2018 revision, there is no alternative arrangement to provide coverage for informal workers besides the formal social security. This study contends that excluding a significant portion of the population from pension schemes limits social services in Tanzania. Informal economy actors willingly contribute to informal social organizations. The contribution assists in addressing the challenges associated with irregular incomes. It was observed that the administrative and regulatory structure designed for the formal sector is not conducive to informal actors, mainly due to bureaucratic processes related to contributions and provisional pensions.

Perlindungan Program Jaminan Sosial Ketenagakerjaan bagi Pekerja Bukan Penerima Upah

Non-wage workers are also included in the informal sector workers and are entitled to social security protection which is carried out in stages in accordance with one of the principles of social security, namely that participation is mandatory. As is known, the development of informal sector workers, especially after the Covid 19 pandemic, has grown very rapidly over time, in the fields of culinary, crafts, household equipment, animals, etc. So the purpose of this article is to discuss employment social security protection for non-wage earners as regulated in Law no. 24 of 2011 concerning Social Security Administering Bodies. Using doctrinal research methods, this article finds that there is a lack of optimization in the absorption of participants in the labor social security protection program by the Employment Social Security Administering Agency due to constraints on the age limit for workers, a lack of understanding by workers in the informal sector of the importance of employment social security and the benefits that can be obtained. accepted. So in this article the ideal social security protection is formulated, namely carrying out comprehensive and gradual socialization by the Employment Social Security Administering Body, the government's role in adjusting the age limits for informal sector workers so that they can provide maximum social security protection, as well as the public's willingness to receive benefits. provided by the Employment Social Security Administering Agency, so that there is synergy and achievement of community welfare.

Economic constraints and gendered rules: Understanding women’s perspectives of how government-imposed restrictions impact women’s mental health and social wellbeing across Afghanistan

This paper examines how the mental health and participation in work-related and social activities of women in Afghanistan has been impacted by the socio-political changes that have been enforced since August 2021. The study hypothesizes that women across Afghanistan from diverse sectors, both formal and informal, are negatively affected by the imposed restrictions, and that it impacts their participation in the workforce, their mental health, and their overall living conditions. The analysis within this paper is based on 124 Key Informative Interviews (KIIs) and Focus Group Discussions (FGDs), which included 33 men and 154 women across six geographic regions of Afghanistan. The findings suggest that within formal and informal job sectors, women have felt a significant disconnect from the market and the community in which they were once thriving, and as a result have experienced worsened living conditions and diminished social status. The paper discusses the significance of women’s participation in the workforce and the positive and meaningful impact women can bring to their communities; highlighting women’s frustration and documenting firsthand accounts of women’s experiences in this new socio-political landscape. It also highlights the new initiatives women are undertaking to continue their work and engage in social activities.

Women and Illegal Trade in Wildlife: A Nigerian Case Study

ABSTRACT Wildlife crime has become a topic of international attention and concern over recent years, and women play a variety of roles in this gray economy. Utilizing qualitative investigation to gain insider accounts, this study examines women input in wildlife crime in communities neighboring a forest reserve in Nigeria. Findings show that bush-meat hunting, wood and timber harvesting are the most pervasive illegal trade in wildlife in the study area. While men mostly perform these trades, women play subordinate roles in the midst of several expressions of physical injuries plus psychological and sexual abuse. Findings show that these activities often provide better economic opportunities for poverty-afflicted women as most of them involve in the trade are unemployed and single-mothers trapped in the dilemma of extreme poverty and a resilient commitment to motherhood, wanting to give their children at least, a better life. The study concludes that women are active participants in illegal trade in wildlife and prevention approaches should involve but not limited to public services education and alternative livelihoods for women such as jobs, business start-ups, and sustainable agriculture.

The macroeconomic impact of a dengue outbreak: Case studies from Thailand and Brazil.

Dengue is spreading in (sub)tropical areas, and half of the global population is at risk. The macroeconomic impact of dengue extends beyond healthcare costs. This study evaluated the impact of dengue on gross domestic product (GDP) based on approaches tailored to two dengue-endemic countries, Thailand and Brazil, from the tourism and workforce perspectives, respectively. Because the tourism industry is a critical economic sector for Thailand, lost tourism revenues were estimated to analyze the impact of a dengue outbreak. An input-output model estimated that the direct effects (on international tourism) and indirect effects (on suppliers) of dengue on tourism reduced overall GDP by 1.43 billion US dollars (USD) (0.26%) in the outbreak year 2019. The induced effect (reduced employee income/spending) reduced Thailand's GDP by 375 million USD (0.07%). Overall, lost tourism revenues reduced Thailand's GDP by an estimated 1.81 billion USD (0.33%) in 2019 (3% of annual tourism revenue). An inoperability input-output model was used to analyze the effect of workforce absenteeism on GDP due to a dengue outbreak in Brazil. This model calculates the number of lost workdays associated with ambulatory and hospitalized dengue. Input was collected from state-level epidemiological and economic data for 2019. An estimated 22.4 million workdays were lost in the employed population; 39% associated with the informal sector. Lost workdays due to dengue reduced Brazil's GDP by 876 million USD (0.05%). The economic costs of dengue outbreaks far surpass the direct medical costs. Dengue reduces overall GDP and inflicts national economic losses. With a high proportion of the population lacking formal employment in both countries and low income being a barrier to seeking care, dengue also poses an equity challenge. A combination of public health measures, like vector control and vaccination, against dengue is recommended to mitigate the broader economic impact of dengue.

Myths of Zimbabwean urban nationalism: Narratives of modernity and exceptionalism in the economic crisis

AbstractZimbabwe has distinct urban nationalist myths stemming from the colonial period—urban modernity and economic exceptionalism. The modernity myth has been constructed from the colonial period and came to be associated with urban order, lifestyle and social mobility. The economic exceptionalism myth refers to Zimbabwe's past exceptional economic performance during the colonial and early postcolonial periods. However, the economic crisis and informalisation from the late 1990s have challenged these myths as neither previous practices of urban modernity nor the feeling of exceptional economic performance is attainable any more. In this context, people in the informal sector reimagine what these nationalist myths mean to them. In particular, they engage in debates about which economic practices are modern enough to be implemented in urban areas, especially in the city centre, and how to identify themselves make a claim to urban modernity. The memory of economic exceptionalism in the meantime acts as a reference point in discussions about future national development. All these translate into the question of legitimacy—of the informal economy and its practices and the government that failed to uphold the modernity and exceptionalism myths.

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.

Performance of Agriculture in Unorganized Sector of India: The Way Forward

The unorganized sector has emerged as the major problem of the country. Most of the informal workers comprise the agriculture sector. So, the present paper is focused on the growth of the unorganized sector in India with special emphasis on the agriculture sector. The agriculture share in gross value added is higher than other sectors. The proportion of selfemployed is higher than casual labour and regular waged workers. In rural areas, workers? livelihoods are dependent upon agriculture because when people have limited or no livelihood opportunities and for earning no formal jobs are there then to fulfil the basic requirement of the family, they are involved in jobs in the informal sector. The government has initiated many measures to formalize unorganized sectors like MGNREGA, Udyam, e-Sharam portal, Atamnirbhar package etc. It is suggested that government should organize awareness camps to inform people about formalization and its potential impact on their lifestyles. Formalization can pave the way for the shift to a green economy.. KEYWORDS :Unorganised sector, Agriculture, Labour force, Formalization, Government initiatives.