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Book part
Publication date: 19 May 2009

Rina Agarwala

Purpose – This chapter illustrates how an economic sociology of work exposes the deeply embedded nature of the informal economy and the social and political lives of its…

Abstract

Purpose – This chapter illustrates how an economic sociology of work exposes the deeply embedded nature of the informal economy and the social and political lives of its growing mass of unprotected workers under globalization. In particular, the premises of economic sociology offer a comprehensive definition of the informal economy that I term, “relational.” In contrast to definitions based on modernization and neoliberal assumptions of isolated economies, relational definitions of the informal economy expose the structures, networks, and political institutions that intertwine informal workers with the formal economy, society, and the state. Operationalizing the relational definition in labor surveys ensures the inclusion of previously invisible informal workers, especially those who operate at the intersection of the informal and formal economy. As well, it ensures the collection of data on the precise ways in which informal workers are socially and politically embedded, including their collective action efforts, the meaning they attach to their labor, and the social networks that determine their life chances.

Methodology – To illustrate this point, I apply a relational definition of informal labor to the case of India, using the National Sample Survey on Employment and Unemployment, as well as findings from interviews with organized informal workers.

Findings – By doing so, I provide an internationally comparative measure of India's informal workforce, illustrate informal workers’ social conditions relative to those of formal workers, highlight the expansion of the informal workforce since the government enacted liberalization reforms, and expose the unique political action strategies Indian informal workers are launching against the state.

Implications/Originality – These findings help us understand Indian informal workers in an internationally comparative context, yielding empirical insights on their social conditions and political organizations for the first time. As well, they call for an important refinement to existing definitions of the informal economy that to date have relied only on Latin American and African experiences.

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Economic Sociology of Work
Type: Book
ISBN: 978-1-84855-368-2

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Book part
Publication date: 19 December 2017

Michael Rogan, Sally Roever, Martha Alter Chen and Françoise Carré

In this chapter, we aim to illustrate some of the forms taken by informal employment in the global south and how these can best be understood by adopting a wider…

Abstract

In this chapter, we aim to illustrate some of the forms taken by informal employment in the global south and how these can best be understood by adopting a wider analytical lens than has been applied in much of the precarious employment literature. We draw on the findings of a recent study of the working conditions of urban informal workers from 10 cities in the global south. The study consisted of focus groups (15 in each city) conducted through the framework of a participatory informal economy appraisal as well as a survey of 1,957 home-based workers, street vendors, and waste pickers. Our findings illustrate a number of ways in which these three groups of informal workers are embedded within the formal economy. While they are not engaged in wage employment, they play subordinate roles to both formal sector firms within global production networks and unequal production relations and to the state through, inter alia, constrained access to public spaces and regulation. In order to interpret these findings, we apply Agarwala’s (2009) “relational” lens to demonstrate how risks and costs are transferred to workers who constitute the “real economy” in much of the global south. Given the often disguised connections between informal employment and the formal economy, this approach also provides a bridge to understanding precarious working conditions and the effects of globalization outside of the industrialized north.

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Article
Publication date: 10 May 2021

Amine Abi Aad and James G. Combs

We raise and address an unexamined research question: Why do managers place some business activities in the formal economy and others in the informal? This firm-level…

Abstract

Purpose

We raise and address an unexamined research question: Why do managers place some business activities in the formal economy and others in the informal? This firm-level managerial choice is most visible in emerging economies and is important due to its performance implications.

Design/methodology/approach

We theorize that managers use social ties with formal institutions (e.g. parliament, central bank) to protect against (1) being singled out for enforcement and (2) opportunistic business partners, and that these protections allow managers to conduct more activities in the informal economy. Based on regulatory focus theory, we also submit that managers with a promotion (prevention) focus mindset are more (less) prone to use their social ties with formal institutions to emphasize the informal economy. Hypotheses are tested using survey data from 362 Lebanese top managers.

Findings

Managers' social ties with formal institutions relate positively to their propensity to use the informal economy, and managers with a promotion mindset are more willing and those with a prevention mindset are less willing to leverage their social ties with formal institutions to conduct activities in the informal economy.

Originality/value

Our study raises an important new research question at the intersection of strategic and international management and offers an initial answer. Working within the informal economy requires informal social ties among informal actors, but for formally registered firms, entry into the informal economy requires informal ties with formal actors.

Details

Cross Cultural & Strategic Management, vol. 28 no. 3
Type: Research Article
ISSN: 2059-5794

Keywords

Open Access
Article
Publication date: 12 November 2020

Aleksandra Webb, Ronald McQuaid and Sigrid Rand

Although the coronavirus (COVID-19) pandemic appears to disproportionately affect those in informal employment, they often receive less government support than the…

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Abstract

Purpose

Although the coronavirus (COVID-19) pandemic appears to disproportionately affect those in informal employment, they often receive less government support than the formally employed. This paper considers definitions of the informal economy and informal employment, explores the rationale for participating in the informal economy and reflects on some effects of the pandemic on these workers.

Design/methodology/approach

The paper presents a narrative literature review with analysis of the selected academic and policy literature.

Findings

There are considerable short- and long-term implications of the pandemic for informal employment and the informal economy. This occurs against the background of unresolved tensions arising from informal workers' desire for more employment security and employers' striving for continued labour flexibility while transferring costs to government and workers. The COVID-19 pandemic might accelerate current trends and force new solutions to better protect basic work security while helping organisations to remain competitive. Government policies supporting work safety, income security, moves to formalisation of employment and fairness for informal employees are particularly important.

Research limitations/implications

As statistical and qualitative evidence is currently limited, it is too early to identify the full effects of COVID-19 on employment in the informal economy.

Practical implications

The results suggest that governments need to carefully consider explicit support for those in informal employment to create fair, resilient and ethical structures for workers, businesses, economies and wider societies.

Social implications

The paper identifies some of the social implications of COVID-19 for the informal sector.

Originality/value

The analysis offers initial insights into the impacts of a major health, economic and social shock on informal working.

Details

International Journal of Sociology and Social Policy, vol. 40 no. 9/10
Type: Research Article
ISSN: 0144-333X

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Article
Publication date: 15 February 2016

Colin C Williams and Ioana Alexandra Horodnic

The purpose of this paper is to advance a new explanation for cross-country variations in the participation of small businesses in the informal economy. Drawing upon…

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2617

Abstract

Purpose

The purpose of this paper is to advance a new explanation for cross-country variations in the participation of small businesses in the informal economy. Drawing upon institutional theory, it proposes that the greater the asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the greater is the propensity of small businesses to participate in the informal economy. To analyse this, the extent to which small businesses evade payroll taxes by paying employees an undeclared (envelope) wage in addition to their official declared salary is analysed.

Design/methodology/approach

To evaluate this, data are reported from a 2013 Eurobarometer survey involving 5,174 face-to-face interviews with employees in small businesses across the 28 member states of the European Union (EU-28).

Findings

The finding is that small businesses display a greater propensity to engage in this informal wage practice in countries where there is a higher degree of asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality). A multi-level logistic regression analysis reveals these to be countries which have lower qualities of governance, lower levels of taxation and intervention in the labour market and less effective social transfer systems.

Research limitations/implications

The major limitation of this study is that it has only examined whether employees in small businesses receive informal wages. Future cross-country surveys should analyse a wider range of ways in which small businesses participate in the informal economy such as under-reporting turnover.

Originality/value

This is the first known analysis of cross-country variations in the participation of small businesses in the informal economy.

Details

Journal of Small Business and Enterprise Development, vol. 23 no. 1
Type: Research Article
ISSN: 1462-6004

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Article
Publication date: 27 June 2008

Sola Fajana

This paper aims to address the issue of unionisation of the largely non‐unionised informal economic activities as a strategy for achieving decent work and pay as well as…

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2176

Abstract

Purpose

This paper aims to address the issue of unionisation of the largely non‐unionised informal economic activities as a strategy for achieving decent work and pay as well as promoting national development in Nigeria.

Design/methodology/approach

The adopted methods include review of archival information and survey of the perspectives of the stakeholders in Nigeria's industrial relations system. To facilitate the realisation of expected developmental objectives, monitoring, evaluation, capacity building, organising and advocacy roles are recommended jointly and severally for the stakeholders.

Findings

It was found that decent work and pay, which would assist poverty minimisation and thus national development, would be furthered by unionisation of the informal sector. At the same time, there are many barriers faced by unions in seeking to organise in the latter area.

Research limitations/implications

The research focuses only on aspects of informal working; the informal economy represents a multi‐facetted and spatially diverse phenomenon.

Originality/value

This paper provides a detailed review of employment relations in non‐standard work in Africa, an area much neglected in the literature.

Details

Employee Relations, vol. 30 no. 4
Type: Research Article
ISSN: 0142-5455

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Article
Publication date: 1 October 2000

Leo McCann

Presents a unique view of informality within the government of Tatarstan which challenges the notion that these forms can be dismissed as simply corruption. Focuses on…

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7485

Abstract

Presents a unique view of informality within the government of Tatarstan which challenges the notion that these forms can be dismissed as simply corruption. Focuses on interviews with investors and businessmen, showing how informality can be an important factor in the reproduction of elite classes. Limits the article to the unique dynamics of the transition from command economy to free market economy but provides resonance with the experiences of those who have worked in many third‐world societies.

Details

International Journal of Sociology and Social Policy, vol. 20 no. 9/10
Type: Research Article
ISSN: 0144-333X

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Book part
Publication date: 22 May 2015

Colin C. Williams

This chapter evaluates the cross-national variations in the proportion of employment that is in informal sector enterprises and evaluates competing theories which view…

Abstract

Purpose

This chapter evaluates the cross-national variations in the proportion of employment that is in informal sector enterprises and evaluates competing theories which view these cross-national variations to result from either economic underdevelopment (modernisation explanation), high taxes, public sector corruption and over-regulation of work and welfare (neo-liberal explanation) or conversely, a lack of intervention in the realm of social protection (political economy explanation).

Methodology/approach

To evaluate these competing explanations, the International Labour Organisation’s (ILO) country surveys that investigate the scale of employment in informal sector enterprise in 43 developing and transition economies, along with the World Bank database of development indicators, are analysed here.

Findings

The finding is that lower levels of employment in informal sector enterprises are closely associated with economic development, lower levels of public sector corruption and state intervention in the form of higher tax rates and social transfers to protect workers from poverty.

Research implications

This chapter reveals the need to move beyond treating these contrasting representations as competing explanations and to recognise how all are required to more fully explain the prevalence of informal sector entrepreneurship.

Practical/social implications

Tackling employment in informal sector enterprise is shown to require broader economic and social policies associated with the modernisation of economies, tax rates, social protection and poverty alleviation.

Originality/value

One of the first evaluations of the competing explanations for why some countries have higher levels of employment in informal sector enterprises.

Details

Exploring Criminal and Illegal Enterprise: New Perspectives on Research, Policy & Practice
Type: Book
ISBN: 978-1-78441-551-8

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Book part
Publication date: 4 June 2005

Karrie Ann Snyder

By synthesizing case studies on the informal economy throughout the world, I show that women and men specialize in different tasks, work in separate settings, and have…

Abstract

By synthesizing case studies on the informal economy throughout the world, I show that women and men specialize in different tasks, work in separate settings, and have differing access to positions of economic power in the informal economy. Moreover, women are more likely than their male counterparts to seek employment in the informal sector. I also explore why gender segregation is such a marked feature of the informal economy by examining characteristics of the informal sector that encourage such gender segregation including the relationship between the informal and formal economies and the social status of informal work.

Details

Gender Realities: Local and Global
Type: Book
ISBN: 978-0-76231-214-6

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Article
Publication date: 31 May 2018

Colin Charles Williams and Slavko Bezeredi

To transcend the long-standing debate regarding whether workers are driven into the informal economy by either their involuntary “exclusion” or voluntary “exit” from the…

Abstract

Purpose

To 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/approach

To 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.

Findings

Identifying 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 implications

The 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/value

This is the first paper to empirically evaluate the existence of a dual informal labour market and to evaluate its policy implications.

Details

Employee Relations, vol. 40 no. 5
Type: Research Article
ISSN: 0142-5455

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