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Begin New Search Topic Informal Economy Political Geography South Asia

1. Labour market inequality in two Asian giants Indonesia and India compared

Author:
Kunal Sen
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We examine the nature of labour market inequality in Indonesia and India, using a common conceptual approach drawing from the job ladder framework. In the framework, we differentiate between self-employment and wage-informal and between formal, upper tier informal, and lower tier informal jobs. We find that both countries have a large proportion of workers in lower tier jobs, though the importance of wage-employment is larger in Indonesia. There are more workers in formal wage-employment in Indonesia than India. There are also sharp disparities in the earnings of workers in different tiers of the labour market in Indonesia and India, and there is limited evidence of convergence of the earnings of the lower tier informal workers to that of formal workers, at least for Indonesia. We also find that gender and educational level are important correlates of work status in both countries. Females and less educated workers occupy the lower tiers of the labour markets in the two countries.
Topic:
Employment, Inequality, Economy, Labor Market, and Informal Economy
Political Geography:
South Asia, Indonesia, India, and Asia

2. Estimating the productivity gap between organised and unorganised small-scale units in India’s manufacturing sector

Author:
Amit Basole, Dimple Chopde, and Paaritosh Nath
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
Small manufacturing firms are considered to be engines of growth and job creation. While most research on small firms focuses on formal sector units, in India informal sector units far outnumber the formal. This is true even for manufacturing units employing 5 to 49 workers, which constitute only 5% of all unorganised units, but in absolute numbers are nine times more numerous than organised units in the same size class. Such firms have the potential to contribute to structural transformation but their capacities vis-a-vis formal firms are not well understood. To address this, we create a unit-level dataset combining Annual Survey of Industries data for organised (formal) units with the National Sample Survey data on unorganised (informal) units. We also discuss problems involved in this exercise and some ways to deal with them. We find that matching organised and unorganised units on observable characteristics reduces the labour productivity differences between them to around 25 percent. We discuss some policy implications of our results.
Topic:
Employment, Manufacturing, Productivity, and Informal Economy
Political Geography:
South Asia and India

3. Loss, Recovery and the Long Road Ahead: Tracking India’s Informal Workers Through the Pandemic

Author:
Paaritosh Nath, Nelson Mandela, and Aishwarya Gawali
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
Drawing on results from a panel of 2778 workers interviewed during and after the 68-day hard lockdown imposed in India, the following study examines the livelihood impact of the pandemic and the extent of subsequent recovery or lack thereof. Focussing specifically on workers located in the informal economy, the study is a useful addition to the burgeoning body of work on the economic impacts of Covid-19 by providing an insight into the employment and earnings recovery of those located at the margins. These findings are spliced across socio-economic groups to showcase the differential impact of the pandemic on different demographics within the informal sector. Our results show that six months after the hard lockdown, one out five persons were still out of work. Conditioned on being employed prior to the lockdown and having lost work during the lockdown, we find that urban respondents, women, workers above sixty and graduates were significantly less likely to recover from the shock. A similar exercise carried out for women workers showed that middle aged women, never married women and women who were not-literate women or educated up until primary and middle school were significantly more likely to recover from job loss. Older women, those located in urban areas and Muslim women were on the other hand significantly less likely to recover from the job loss. Earnings on the whole were half of what they used to be prior to the pandemic. Some better off workers shifted to more precarious types of employment. Given the fall in earnings poorer worker households were forced to borrow and the amount of loan taken was multiple times their average monthly income. In the context of loss in employment and reverse migration, the survey results show a substantial unmet demand for work under the MGNREGA programme even after the lockdown was lifted. We conclude that despite a partial recovery in the subsequent period, the pandemic induced lockdown has undermined the material conditions for subsistence for a large segment within the informal economy. Moreover, any attempts made to re-imagine what a social protection programme for the informal economy should look like must take into account the segments most susceptible to an economic shock on their livelihoods.
Topic:
Labor Issues, Employment, Survey, COVID-19, and Informal Economy
Political Geography:
South Asia and India

4. The gendered crisis: livelihoods and mental well-being in India during COVID-19

Author:
Farzana Afridi, Amrita Dhillon, and Sanchari Roy
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper studies the impact of the COVID-19 crisis on the gendered dimensions of employment and mental health among urban informal-sector workers in India. First, we find that men’s employment declined by 84 percentage points post-pandemic relative to pre-pandemic, while their monthly earnings fell by 89 per cent relative to the baseline mean. In contrast, women did not experience any significant impact on employment post pandemic, as reported by their husbands. Second, we document very high levels of pandemic-induced mental stress, with wives reporting greater stress than husbands. Third, this gendered pattern in pandemic-induced mental stress is partly explained by men’s employment losses, which affected wives more than husbands. In contrast, staying employed during the pandemic is associated with worse mental health for women and their (unemployed) husbands. Fourth, pre-existing social networks are associated with higher mental stress for women relative to men, possibly due to the ‘home-based’ nature of women’s networks.
Topic:
Gender Issues, Employment, Mental Health, COVID-19, Informal Economy, and Social Networks
Political Geography:
South Asia and India

5. An Approach to the Problem of Employment in India

Author:
Deepankar Basu
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
The challenge of employment in the Indian economy, especially after it growth acceleration since the mid-1980s, relates to its quality rather than its quantity. While employment growth has kept pace with the labour force over the long run, what has grown is informal employment. The coexistence of rapid capital accumulation, robust output growth and lack of growth of formal employment can be understood using the well-known Harris-Todaro model of a dual economy. This framework highlights the key role of the wage gap between the modern and traditional sectors as a determinant of urban informal employment. Hence, one of the most effective and egalitarian ways to address the employment problem is to adopt policies to increase agricultural productivity and income, which can reduce the wage gap. Since crop yields in India are far lower than many other countries in the world, including China, Brazil, and Bangladesh, there is ample scope for land-augmenting and labour-absorbing technological change in Indian agriculture. Efforts to ramp up industrialization should be taken up in earnest only after the wage gap has been narrowed significantly.
Topic:
Agriculture, Employment, Economic Growth, and Informal Economy
Political Geography:
South Asia and India

6. Three strategies for empowering women in informal economies

Author:
Ammar A. Malik and Hadia Majid
Publication Date:
06-2017
Content Type:
Commentary and Analysis
Institution:
Urban Institute
Abstract:
Pakistan is the sixth most populated country in the world, and at least two in five Pakistanis will live in urban areas by 2020. But, as in the rest of South Asia, rapid urbanization in Pakistan is “messy” and hidden. A large-scale informal economy and poor public service delivery is dampening the potential productivity benefits of agglomeration. Seventy-eight percent of nationwide nonagricultural jobs are in the informal economy, and some 22 million people are in such roles, most of them women. Most of an estimated 8.5 million mostly unregulated domestic workers are also women. Underdeveloped and unenforced work regulations make women disproportionately more susceptible to exploitive working conditions. They are poorly compensated and forced to work in hazardous circumstances without proper social or legal protections. Beyond the ambit of taxation, they are seldom considered productive economic agents and are relegated as secondary contributors to the economy. These issues with urbanization and informal economies are not unique to Pakistan. All South Asian countries have similar problems. But overall gender disparities in Pakistan are considerably higher than the regional average, and the fact that more women are poor than men poses a particular challenge for women in Pakistan’s urban informal sector.
Topic:
Gender Issues, Urbanization, Women, Economy, and Informal Economy
Political Geography:
Pakistan and South Asia

7. Without improved public service delivery, women in developing countries can’t take advantage of economic opportunity

Author:
Ammar A. Malik and Jasmina Pless
Publication Date:
02-2016
Content Type:
Commentary and Analysis
Institution:
Urban Institute
Abstract:
An estimated 1.5 billion people live on less than $1 per day—the majority of whom are women. The “the feminization of poverty,” the worldwide gap between women and men trapped in poverty, has grown during the past decade. As developing countries continue to urbanize, uneven access to public services prevents women from taking full advantage of the newly available economic opportunities. Despite women’s improved overall labor force participation, they often end up with lower paying, precarious jobs—often in the informal economy. In Pakistan for instance, three-quarters of women engaged in non-agriculture jobs work in the informal economy without laws or public policies to protect them. That’s an estimated 8.5 million domestic workers. Governments typically clamp down on informal establishments by shutting them down or simply ignore their existence. The lack of appropriate legal or regulatory systems further increases women’s vulnerability to exploitation through low wages or lack of employment protections. Women are seldom viewed as productive economic agents as they are outside the tax net.
Topic:
Development, Women, Economic Growth, and Informal Economy
Political Geography:
Pakistan and South Asia