To read this content please select one of the options below:

Evaluating the internal dualism of the informal sector: evidence from the European Union

Colin C. Williams (Management School, University of Sheffield, Sheffield, UK)
Ioana Alexandra Horodnic (Department of Management Marketing and Business Administration, Alexandru Ioan Cuza University of Iasi, Iasi, Romania)
Jan Windebank (Modern Languages Teaching Centre, School of Languages and Cultures, University of Sheffield, Sheffield, UK)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 11 September 2017

303

Abstract

Purpose

To transcend the current debates about whether participation in the informal sector is a result of informal workers “exclusion” or their voluntary “exit” from the formal sector, 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 exclusion-driven “lower-tier” of informal workers.

Design/methodology/approach

To do this, data from a 2013 Eurobarometer survey involving 27,563 face-to-face interviews across the European Union is reported.

Findings

The finding is that in the European Union, there is a dual informal labour market with those participating in the informal sector due to their exclusion from the formal sector being half the number of those doing so to voluntarily exit the formal sector. Using a logistic regression analysis, the exclusion-driven “lower tier” is identified as significantly more likely to be populated by the unemployed and those living in East-Central Europe and the exit-driven “upper tier” by those with few financial difficulties and living in Nordic nations.

Research limitations/implications

The results reveal the need not only to transcend either/or debates about whether participants in the informal sector are universally exclusion-or exit-driven, and to adopt a both/and approach that recognises a dual informal labour market composed of an exit-driven upper tier and exclusion-driven lower tier, but also for wider research on the relative sizes of these two tiers in individual countries and other global regions, along with which groups populate these tiers.

Originality/value

This is the first evaluation of the internal dualism of the informal sector in the European Union.

Keywords

Citation

Williams, C.C., Horodnic, I.A. and Windebank, J. (2017), "Evaluating the internal dualism of the informal sector: evidence from the European Union", Journal of Economic Studies, Vol. 44 No. 4, pp. 605-616. https://doi.org/10.1108/JES-07-2016-0144

Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

Related articles