Workers and labour market outcomes of informal jobs in formal establishments

Abstract

How can an informal job in formal establishments be defined, who has an informal job and what are the labour market outcomes? This chapter uses data of comparable face-to-face surveys in nine countries: Benin, Ghana, Guinea, Kenya, Madagascar, Niger, Rwanda, Senegal and Togo. An index for job-based informality is developed, based on employment status and contribution and entitlement to social security. Young and low-educated workers are more likely to hold informal jobs; even more so are workers in small enterprises, in trade, transport and hospitality, and in unskilled occupations, while workers in skilled occupations and with high education are less likely to hold informal jobs. No evidence is found regarding gendered effects. The more informal, the poorer the labour market outcomes: wages are lower, while the chances are higher of being paid below the minimum wage, working more than 48 hours, and not being covered by a collective agreement.

Related papers based on the Informality Index can be found here:  

• Tijdens, K. G., Besamusca, J & Van Klaveren, M. (2014). Workers and labour market outcomes of informal jobs in formal employment. A job-based informality for nine sub-saharan African countries. University of Amsterdam, AIAS Working Paper 140.
• Tijdens, K., Besamusca, J. & van Klaveren, M. (2015). Workers and Labour Market Outcomes of Informal Jobs in Formal Establishments. A Job-based Informality Index for Nine Sub-Saharan African Countries. The European Journal of Development Research, 27, 868–886. https://doi.org/10.1057/ejdr.2014.73

Acknowledgements

This chapter uses data collected on behalf of the Decent Wage Africa–Francophone project, funded by the Dutch Christian Confederation of Trade Unions (CNV), and the Enabling Social Dialogue project in Ghana, Kenya and Tanzania, funded by Development Aid from the Dutch Trade Union Federation (FNV) and the Dutch Employers’ Cooperation Programme (DECP), both supervised by the WageIndicator Foundation. The authors thank participants of ILO’s 3rd Regulating Decent Work conference (3–5/07/2013, Geneva), the 8th IZA/World Bank Conference on Employment and Development (22–23/08/2013, Bonn) and the WageIndicator-WEBDATANET workshop (27/08/2013, Amsterdam) for comments on earlier versions, as well as three anonymous referees for their valuable comments. Special thanks are due to Godius Kahyarara, Ngeh Ernest Tingum, Paulien Osse and Brian Fabo.