Beyond Hierarchical Representations of the Formal/Informal Employment Dualism

Abstract

This paper evaluates critically the conventional hierarchical representation of the formal/informal employment dualism, which depicts formal employment as extensive and positively contributing to economic development and social cohesion, and the separate realm of informal employment as weaker, inhabiting the margins and impairing progress and development. Although the discourses of informal employment as weak, marginal and separate from formal employment have been previously put under the spotlight, there has been little questioning of whether informal employment is a negative phenomenon. Through a study of Ukraine, however, this paper finds evidence that informal employment positively contributes to not only economic development as a seedbed for enterprise and entrepreneurship but also social cohesion as a primary vehicle for delivering community self-help. The outcome is a call for a finer-grained understanding of informal (and ultimately also formal) employment that recognises its plurality of forms and their varying consequences for economic development and social cohesion.

Explaining Participation in Undeclared Work

“…Most employees were against this arrangement since it affected their social security and pension entitlements as well as their ability to get credit and loans. This Moscow study thus reinforces earlier findings elsewhere that this wage practice is largely imposed on employees by employers (Sedlenieks 2003;Karpuskiene 2007;Woolfson 2007;Zabko and Rajevska 2007;Williams and Round 2009). …”

The Effect of Education on Informal Sector Participation in a Post-Communist Country

“…The data set provides information on the sector in which individuals work, as well as other available information on reported tax payments. Given the core of the informal sector definition used here-employment not declared to the state for tax, social security, and labour law purposes (Williams and Round, 2009)-and the difficulty of capturing informal sector activities, we consider both information on working sector and tax evasion in measuring informal sector participation. The information on the sector in which individuals work is captured by asking respondents to report the sector they work in from a list of seven categories [e.g.…”

“…Starting from complete neglect, the phenomenon of informal economy has grown to be a subject of study by many researchers, focusing on developing and developed countries, as well as on post-communist countries (Schneider and Enste, 2000;Gërxhani, 2004a). The academic thought about this phenomenon has developed from the earliest studies (Boeke, 1953;Swaminathan, 1991), which contemplated the informal sector as a marginal or residual activity, to later ones (Harding and Jenkins, 1989;Williams and Round, 2009), that consider it a central aspect of the economic and social dynamics of any country, but especially of the less developed ones.…”

Political Economy of Informalization

“…Despite the growing body of literature arguing that the relationship between the formal economy and the informal economy is much more complex (Benería 2001;D. W. Light 2004;Schierup et al 2006;Ram et al 2007;Slavnic 2008;Slavnic and Urban 2008;Williams and Round 2009), this tendency towards reification, as Harding and Jenkins (1989: 137) put it, or over-emphasizing the formal nature of modern bureaucratized societies is a distinctive feature of the dominant political, media, and even scientific discourses in the field.…”