What is it about?

The aim of this paper is to evaluate critically the competing explanations for the cross-national variations in the scale of informal employment which variously correlate higher levels of informal employment with economic under-development (‘modernisation’ theory), corruption, higher taxes and state interference (‘neo-liberal’ theory) and inadequate state intervention to protect workers from poverty (‘structuralist’ theory).

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Why is it important?

Some 34.4 per cent of the non-agricultural workforce is in informal employment across these 41 countries, with the share in informal employment ranging from 83.6 per cent in India to 6.1 per cent in Serbia. Evaluating critically the competing explanations, a call is made for a synthesis of the modernisation and structuralist theoretical perspectives in a new ‘neo-modernisation’ theory that tentatively associates higher levels of informal employment with economic under-development, smaller government and inadequate state intervention to protect workers from poverty.

Perspectives

This is the first paper to use a direct survey to analyse and explain cross-national variations in informal employment in less developed economies.

Professor Colin C Williams
University of Sheffield

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This page is a summary of: Cross-national variations in the scale of informal employment, International Journal of Manpower, May 2015, Emerald, DOI: 10.1108/ijm-01-2014-0021.
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