A Note on Informality in the Labour Market

Abstract

Informality in the labour market is far from clearly defined in the development literature. To understand the nature of informality in terms of the legalistic and the productivity view, this paper makes an empirical contribution to the debate. This paper provides a detailed analysis of the informality dimensions in the Mexican labour market, employing a rich labour market data set. A substantial overlap between the current social security coverage, contracts and individual's job history is found. Moreover, age, education, marital status and scores in the Raven's test, an ability measure, are significant determinants for the various forms of informality. 4 The closest paper to this, by Henley et al. (2009), investigates informality in the Brazilian labour market. However, my paper looks at further dimensions of individual labour market informality, such as migration and job history, and thereby exploits the panel structure. 5 As Fields (2009) argued, it is important to understand what measure of informality is in the studies at hand. He proposed instead of talking about 'formality' versus 'informality' that the actual dividing criteria should be used, such as 'covered' versus 'uncovered'. M. Khamis

Informal employment dynamics in Ukraine: An analytical model of informality in transition economies

“…Although this last question does not have a qualifier, the small average size (four people) of enterprises employing workers with second jobs in our sample provides justification for taking all second jobs as unregistered and informal, which is in line with the World Bank's usual classification of micro firms in emerging markets as informal (e.g. Perry et al, 2007;Castells and Portes, 1989;Khamis, 2009). Table 1 displays three measures of informal employment as percentages of total employment in 2003 and 2004.…”

What drives the spatial wage premium in formal and informal labor markets? The case of Ecuador

“…Furthermore, a major concern in the case of the developing countries lies in the informal economy, which implies the presence of a dual labor market, informal workers representing around half of the labor force (La Porta & Shleifer, 2014;Maloney, 2004;Overman & Venables, 2005). Informal labor is usually represented by low-educated workers (Fields, 1990;Khamis, 2012) and associated with high levels of vulnerability and poverty, low wages and productivity, and lack of legal protection (Bacchetta, Ernst, & Bustamante, 2009;Fields, 1990). Consequently, in our view, a thorough analysis of the relevance of spatial externalities in a developing economy should take this dimension into account (Glaeser & Henderson, 2017).…”

Modelo analítico de la dinámica del empleo informal en economías en transición: el caso de Ucrania

“…Si bien esta segunda pregunta no informa sobre el tipo de empleo, el hecho de que los individuos de nuestra muestra ejerzan su segundo empleo en empresas con solo cuatro trabajadores por término medio justifica que consideremos que todo segundo empleo es informal y no declarado; esto está en consonancia con el criterio habitual del Banco Mundial de clasificar a las microempresas de mercados emergentes como informales (véase, por ejemplo, Perry et al, 2007;Castells y Portes, 1989;Khamis, 2009).…”