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Informalization, Economic Growth and the Challenge of Creating Viable Labor Standards in Developing Countries

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  • Robert Pollin
  • James Heintz

Abstract

Over recent decades, there has been the substantial rise in the proportion of people engaged in what is termed informal employment, generating a broad trend toward “informalization” of labor market conditions in developing countries, even when economic growth is proceeding. We consider the relationship between the rise of informalization and the corresponding ascendancy of neoliberal policies in developing countries, focusing in particular on how the decline in average per capita GDP growth associated with neoliberalism has fostered informalization. We then explore policy measures for raising the proportion of decent jobs with core social protections in developing countries—which means, as we argue, reversing the process of informalization. We examine policy measures in two areas: raising the rate of economic growth and improving the regulation of labor markets.

Suggested Citation

  • Robert Pollin & James Heintz, 2003. "Informalization, Economic Growth and the Challenge of Creating Viable Labor Standards in Developing Countries," Working Papers wp60, Political Economy Research Institute, University of Massachusetts at Amherst.
    • Handle: RePEc:uma:periwp:wp60
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    References listed on IDEAS

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    Cited by:

    1. -, Anupama, 2013. "Deficits In Productive Employment In India," Journal of Regional Development and Planning, Rajarshi Majumder, vol. 2(2), pages 87-107.
    2. Nahid Sultana & Mohammad Mafizur Rahman & Rasheda Khanam, 2022. "Informal Sector Employment and Economic Growth: Evidence from Developing Countries in SDG Perspective," Sustainability, MDPI, vol. 14(19), pages 1-19, September.
    3. Sadam Hussain & Muhammad Shahid Akram & Abdul Ghaffar & Yasmeen Qamar & Waqar Ahmad, 2019. "Impact of Foreign Investment, Labor Force and Interest Rate on Economic Growth: A Case of Pakistan (Under CPEC Project Contribution Countries)," Asian Development Policy Review, Asian Economic and Social Society, vol. 7(4), pages 369-377, December.
    4. Sweidan Osama, 2017. "Economic Freedom and the Informal Economy," Global Economy Journal, De Gruyter, vol. 17(4), pages 1-10, December.
    5. Loudi Njoya & Ibrahim Ngouhouo & Moussa Njoupouognigni & Schneider Friederich & Zenabou Tourere, 2024. "Can we understand the simultaneous evolution between economic and informality growth in Africa? A preliminary explanation," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 398-414, January.
    6. David KUCERA & Leanne RONCOLATO, 2008. "Informal employment: Two contested policy issues," International Labour Review, International Labour Organization, vol. 147(4), pages 321-348, December.
    7. Dsouza, Alwin & Singh, Sudershan & Ranjan, Rahul, 2015. "Existence of Structural Disadvantage among socio-religious groups: Is it a reality? An Analysis of Indian Labour Market," MPRA Paper 63648, University Library of Munich, Germany.
    8. Arslan Razmi, 2007. "Integration, Informalization, and Income Gaps in Developing Countries: Some General Equilibrium Explorations in Light of Accumulating Evidence," UMASS Amherst Economics Working Papers 2007-06, University of Massachusetts Amherst, Department of Economics.
    9. repec:ilo:ilowps:452884 is not listed on IDEAS
    10. Tsikata, Dzodhi., 2009. "Domestic work and domestic workers in Ghana : an overview of the legal regime and practice," ILO Working Papers 994528843402676, International Labour Organization.
    11. Isabel Sainz-Fernandez & Begoña Torre-Olmo & Carlos López-Gutiérrez & Sergio Sanfilippo-Azofra, 2018. "Development of the Financial Sector and Growth of Microfinance Institutions: The Moderating Effect of Economic Growth," Sustainability, MDPI, vol. 10(11), pages 1-16, October.
    12. Arslan Razmi, 2006. "Aspects of Informalization and Income Distribution in Developing Countries: A Modified Specific Factors Approach," UMASS Amherst Economics Working Papers 2006-03, University of Massachusetts Amherst, Department of Economics.
    13. Anamika Moktan, 2019. "Is growth improving employment quality in India? Evidence of widening subnational inequality," The Economic and Labour Relations Review, , vol. 30(2), pages 285-306, June.
    14. Saniye Dedeoğlu, 2010. "Visible Hands - Invisible Women: Garment Production in Turkey," Feminist Economics, Taylor & Francis Journals, vol. 16(4), pages 1-32.
    15. Anirban Dasgupta, 2011. "Forum 2011," Development and Change, International Institute of Social Studies, vol. 42(1), pages 458-467, January.
    16. Bimal Kishore Sahoo & Bhaskar Jyoti Neog, 2017. "Heterogeneity and participation in informal employment among non-cultivator workers in India," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(4), pages 437-467, July.

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