The informal sector deprives states of revenues and workers of social protection. It also, however, frequently constitutes the most dynamic part of the economy and creates massive employment. Informal employment is ubiquitous and growing. The financial crisis that began in 2008 has made the management of informal employment even more challenging.  Responding to this emerging challenge is critical, not only for the well being of millions of workers but also for social development. Is Informal Normal? provides evidence for policy makers on how to deal with this issue of crucial importance for developing and developed countries alike. This book includes StatLinks, URLs linking charts and graphs to Excel files containing the data.
“In countries such as China, the exceptional scale of rural to urban migration amplifies the challenges from informality. This work provides valuable analytical results for understanding this major transformation, its problems and impacts.”
                       -Professor Li Shi, Beijing Normal University
“This volume is an important contribution to the current policy debates on the informal economy. It recommends providing support to the working poor in the informal economy, making formal structures more efficient and flexible and creating more formal jobs.”
                      -Professor Marty Chen, Harvard Kennedy School and WIEGO
“The strengths of this volume are many: evidence that “Informal Is Normal;” references to many newer studies and ways of thinking; the consistent three-pronged strategy; accessibility. Is Informal Normal? will serve as a reference in the literature on informality for years to come.”
                      -Professor Gary Fields, Cornell University

Is Informal Normal

This paper focuses on the determinants of the labor market situation of young people in developed countries and the developing world, with a particular emphasis on the role of vocational training and education policies. We highlight the role of demographic factors, economic growth and labor market institutions in explaining young people's transition into work. Subsequently, we assess differences between the setup and functioning of the vocational education and training policies across major world regions as an important driver of differential labor market situation of youth. Based on our analysis, we argue in favor of vocational education and training systems combining work experience and general education and provide some policy recommendations regarding the implementation of education and training systems adapted to a country's economic and institutional context.

/pdf/youth-unemployment-and-vocational-training-4zi0nqg1dm.pdf

Youth Unemployment and Vocational Training

This article addresses two contested issues of crucial importance to policy, namely: formal labour regulations as a cause of informal employment, and so-called "voluntary" informal employment. The authors provide theoretical overviews on both issues and an extensive survey of empirical studies on the effects of formal labour regulations on informal employment. The article closes with observations on the relevance of the ILO's four decent work objectives for informal employment and economic development, with particular emphasis on the significance of - and poten- tial for - organizing workers in the informal economy. here are at least ten publications to date whose titles tell us that informal T employment is being "revisited". With so many visits and revisits, one risks a worn out welcome. Yet disaccord persists on such fundamental issues as the causes and quality of informal employment. Against this background, this article addresses two contested issues, both of policy importance: so-called voluntary informal employment, and formal labour regulations as a cause of informal employment. Perhaps the most essential work on voluntary informal employment is Fields (1990), but the issue has received renewed attention with the contribu- tions of Maloney (1999 and 2004) and his co-authors (e.g. Maloney and Bosch, 2007). The basic idea is that informal employment is heterogeneous, character- ized by what Fields calls "easy-entry" and "upper-tier" informal employment, and that "upper-tier" informal employment is "better" than and "preferred to formal sector employment" and is "voluntary" (Fields, 1990, pp. 50 and 66). Voluntary informal employment poses a challenge to conceptions concentrating

/pdf/informal-employment-two-contested-policy-issues-57zikhbnx7.pdf

Informal employment: Two contested policy issues

Improving school-to-work transitions and ensuring better career opportunities for youth after labour market entrance are common goals in emerging and advanced economies as they can contribute to raising the productive potential of the economy and to increasing social cohesion However, the challenges faced in achieving these objectives and the policies required vary between emerging and advanced economies This paper analyses youth labour market outcomes in 16 countries: eight emerging countries and eight advanced economies In light of this analysis, it also discusses differences and similarities in the policy measures countries have at their disposal to tackle the key emerging challenges

/pdf/same-same-but-different-school-to-work-transitions-in-4p1uqnz6gq.pdf

Same Same but Different: School-to-work Transitions in Emerging and Advanced Economies

Using both qualitative and quantitative (meta-analysis) methods, this paper reviews the growing evidence on the impact of minimum wages on employment in 14 major emerging economies (Argentina, Brazil, Chile, China, Colombia, India, Indonesia, Mexico, Poland, the Philippines, the Russian Federation, South Africa, Thailand and Turkey). Overall, minimum wages are found to have only a minimal impact on employment, and there is evidence of reporting bias towards statistically significant negative results. More vulnerable groups (e.g. youth and the low-skilled) are marginally more negatively affected, and there is some indication that higher minimum wages lead to more informal employment.

pdf/the-effect-of-minimum-wages-on-employment-in-emerging-sgxz414ya6.pdf

The effect of minimum wages on employment in emerging economies: a survey and meta-analysis

Some developing countries have set their minimum wages too high or too low to constitute a meaningful constraint on employers. The article compares minimum wages worldwide, proposes several ways of measuring them in develop- ing countries and discusses whether they are effective thresholds in those countries. The second part of the article considers the institutional factors leading countries to set minimum wages at extreme levels. The author concludes that the minimum wage is used as a policy instrument to several ends - wage negotiation, deflation and social dialogue - which results in the absence of a wage floor, weak collective bargaining, or non-compliance. n the political economy of minimum wage setting, the debate about mini- I mum wages among mainstream labour economists typically opposes two points of view. The first is that a judiciously set minimum wage can make a modest contribution to meeting social goals, without much distortion of employment patterns; and the second, that the best policy is to leave wage set- ting entirely to supply and demand (and, maybe, to collective bargaining), without any recourse to legislation or other regulatory measures to establish a minimum wage. This article will not engage in that debate (as it would require at least a book!): it adopts the former view (Saget, 2001). Working from that perspective, the article shows that a considerable number of countries set mini- mum wages at levels that seem either far too low or far too high to be con- sidered reasonable. Having documented these anomalies, it then analyses why such policy choices emerged in those countries.

Fixing minimum wage levels in developing countries: Common failures and remedies

Understanding youth labour market disadvantage: Evidence from south‐east Europe

Based on data analysis and surveys of firms in four countries, focuses on wage fixing in the informal economy and the role of the minimum wage in informal wage determination. Includes also information on working hours in informal firms.

Wage fixing in the informal economy : evidence from Brazil, India, Indonesia and South Africa

This paper seeks to identify trends in rights at work during the global financial and economic crisis that began in 2008, in terms of international labour standards. Its primary sources of information use recent observations of the International Labour Organisation’s Committee of Experts on the Application of Conventions and Recommendations (CEACR) relating to the crisis, as well as data collected in the ILO/World Bank inventory standardized questionnaire of policy responses to the crisis on a sample of 50 countries covering the period mid-2008 - mid-2010.

/pdf/rights-at-work-in-times-of-crisis-trends-at-the-country-jf9ktx2rej.pdf

Rights at work in times of crisis: Trends at the country level in termsof compliance with international labour standards

Available studies show that the lack of decent work opportunities for youth is probably one of the most daunting problems faced by countries in South-East Europe (SEE). Yet, the lack of comprehensive, integrated and centralized databases on youth labor market disadvantage in transition countries in general, and in South-East Europe in particular, has usually been a major barrier for a comprehensive analysis of the problems that youth face in the labor market in the region. For the purpose of this study, an attempt was made to create comparable indicators of youth labor market outcomes for 10 regions of SEE, relying on 7 Labor Force Surveys (LFS) and 6 Living Standard Measurement Surveys (LSMS) conducted around 2001. These data show that more than ten years after the beginning of transition, and despite obvious signs of economic recovery in most SEE regions, the average youth unemployment rate in SEE remained 2.5 times higher than the EU average, and 3 times higher than the adult unemployment rate.

Towards a better understanding of the nature, causes and consequences of youth labor market disadvantage: evidence for South-East Europe

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