Week 5 : Informal Work

Gender & Development: Informal Work

Introduction

Women's informal work in the global south is a critical but often invisible component of economic and social systems. This section introduces the concept and significance of informal work, especially as it relates to gender.

• Women's informal work is essential for household and community survival, yet frequently goes unrecognized in official statistics and policy.

• Includes home-based work, domestic labor, agriculture, and small-scale enterprises.

• Women often lack legal protections and social benefits, sustaining households, communities, and economies without recognition.

• The majority of informal workers in Latin America, Africa, and South/South-East Asia are women.

• The informal economy is often framed as "subsistence," which can obscure deeper structural inequalities.

Context of Informal Work

Informal work is shaped by a range of social, economic, and legal factors that disproportionately affect women.

• Structural factors such as patriarchal norms, limited education, and discriminatory laws restrict women's opportunities.

• Rural informal work: unpaid or underpaid agricultural labor.

• Urban informal work: street vending, domestic work, small manufacturing.

• Informal work is typically low-paid, insecure, and unprotected, influenced by global market forces, neoliberal policies, and supply chains.

• Some informal work offers flexibility and autonomy, which can be beneficial for women balancing multiple roles.

Reproduction and Informal Work

Informal work often intersects with unpaid social reproduction, such as caregiving and household management.

• Social reproduction includes child-rearing, elder care, and domestic chores, which are undervalued in policy and economic theory.

• Women in informal work face exploitation, health risks, and limited access to collective bargaining.

• Women organize cooperatives, unions, and networks to improve working conditions.

Defining Informality

Informal economy refers to activities outside formal regulation, taxation, and labor protections.

• Early definitions focused on small, unregistered businesses; later definitions include unprotected wage work.

• Informal workers lack labor rights, social security, maternity leave, or severance pay.

• Types of informal employment: self-employed, casual laborers, family workers, apprentices, domestic and contract workers.

• Informal work can occur in informal enterprises, households, or even within formal enterprises.

International Labour Organization (ILO) Framework

The ILO divides informal employment into two main groups:

• Workers in informal enterprises: self-employed, employers in informal businesses, employees in informal enterprises, members of informal producer cooperatives.

• Workers in informal jobs outside the informal sector: casual wage workers, contract workers, outworkers, home-based workers, paid domestic workers without social protection, family workers in formal enterprises.

Examples of Formal and Informal Jobs

Understanding the distinction between formal and informal jobs is crucial for analyzing labor market dynamics.

• Formal jobs: full-time accountant, public school teacher, factory worker with contract and social security.

• Informal jobs: street food vendor, casual janitor, delivery rider without benefits, nanny or housekeeper on contract, live-in caregiver without security.

• Some domestic workers may have formal contracts and social security, but this is rare.

Informality in Practice

Informality arises from short-term or casual jobs, low wages, and weakly enforced labor laws.

• Common in domestic work, day labor, textile/industrial work, and unregistered employment.

• Not limited to small-scale self-employment; includes workers in formal enterprises.

• The informal economy is diverse, complex, and embedded in national economies.

Approaches to Formalization

Formalization refers to the process of integrating informal work into the formal economy, but this process is complex and varies by context.

• Formalization was once seen as an automatic part of development, with economic growth shifting work from informal to formal arrangements.

• Recent experience shows development paths are complex; formalization is not always linear or beneficial.

• Multiple trajectories exist, with different outcomes for workers.

Classical Trajectory (Kuznets-Lee Model)

• Associated with mid-20th century developed economies (e.g., South Korea, Japan, Western Europe).

• Rapid industrialization led to a shift from agricultural to urban industrial employment, with contracts, social protections, and unionization.

Reverse Path (Informalization of Formal Activities)

• Previously formal jobs shift into informality due to liberalization and structural adjustment.

• Examples: Argentina (1990s), South Africa (post-apartheid), Southern Europe (Greece, Italy, Spain).

Case: Value Chain Integration Without Improved Conditions

• Informal labor integrates into value chains of formal enterprises without improved conditions.

• Example: India's garment industry—workers produce for formal firms but remain outside formal contracts.

• Example: Mexico's maquiladora sector—temporary, low-wage workers mimic formal jobs but lack protections.

Desirable Path (Policy-Driven Inclusive Formalization)

• Countries pursue policies supporting informal workers and small enterprises.

• Example: Brazil—reforms extended health insurance, collective bargaining, and simplified registration for microenterprises.

• Example: Thailand—universal healthcare and microcredit schemes support informal workers.

Formalization Strategies

Governments can regulate informal enterprises, extend social protection, and create formal sector jobs to improve productivity and income.

• Comprehensive approaches require investment and prioritization of decent work.

• Simpler strategies (e.g., registration, limited protection) are less effective and can create new problems for women.

Costs and Benefits of Formalization

Formalization has both costs and benefits for enterprises and workers.

• Formal enterprises: costs include registration fees, taxes, and regulations; benefits include legal protection, enforceable contracts, financial services, and infrastructure.

• Formal workers: benefits include legal recognition, protection from discrimination, higher wages, health/safety standards, pensions, and the right to organize.

• Resistance often comes from employers, not workers.

• Formal workers may still face long hours, low pay, and little control.

• Effectiveness depends on government strategies and civil society pressure.

Gender and Formalization

Gender shapes both participation in informal work and the outcomes of formalization policies.

• Women-run businesses often face higher costs, fewer benefits, and less access to credit and assets.

• Women are vulnerable to harassment, corruption, and abuse by authorities.

• Street vendors face physical risks, rarely solved by regulation.

Women and Regulation

Women-led businesses respond to regulation in four ways (Ravi Kanbur):

• Comply fully with rules (genuine formalization).

• Fall under regulation but do not comply—legal grey area.

• Adjust activities to escape regulation.

• Already outside regulation—no change needed.

• Women-led enterprises often face higher costs and uncertainty.

Employment Protections and Challenges

Extending protections and social benefits is positive in principle but can be ineffective if employers cannot afford them.

• Maternity benefits and pensions may lead to fewer jobs for women if not properly enforced.

• Enforcement, corruption, and resource constraints undermine protections.

• Women are especially vulnerable due to limited knowledge and resources.

Case Study: The Informal Economy in Ghana

Ghana's workforce is predominantly informal, with formal jobs representing a small share.

• Economic liberalization reduced government involvement and weakened the formal sector's capacity to absorb workers.

• Rural informal work: agriculture, fishing, forest products (men dominate in some sectors, women in others).

• Urban informal work: women dominate street vending and market stalls; men dominate construction, manufacturing, and extractive industries.

• Informal labor includes casual work, self-employment, apprenticeships, and day labor.

• Labor force participation rates for men and women are high and nearly equal (~75-80%), but underemployment and reliance on informal work are widespread.

Formalization Efforts in Ghana

• Efforts focus on enterprise formalization, with limited impact on employment.

• Contract farming links agribusiness and small farmers (mostly women), but most work is casual and temporary.

• Technical roles are usually reserved for men.

• Certification limits child labor and restricts pregnant women's work, but wage gaps and poor conditions persist.

Domestic Trading in Ghana

• Women dominate lower-income street vending and market stalls; men dominate higher-income segments.

• Government regulation focuses on revenue and urban planning, often leading to evictions and confrontations.

• High interest rates and weak banking institutions leave traders reliant on informal credit.

• Associations provide support, but state regulation offers little protection.

• Informality remains dominant, with gender segmentation and poor conditions.

Case Study: Commercial Surrogacy in India

Commercial surrogacy is a form of informal work with similar vulnerabilities: unprotected, temporary, and insecure.

• Surrogates lack minimum wage, job security, or health benefits.

• Predominantly from marginalized, low-income backgrounds; economic need drives participation.

• Power imbalances with clinics and intermediaries limit autonomy and bargaining power.

• Dynamics mirror broader labor markets with exposure to exploitation and limited legal recourse.

Surrogacy as Reproductive Labor

• Commercial surrogacy exemplifies reproductive labor as informal work, commodifying women's reproductive capacities for economic gain.

• Surrogacy is undervalued and invisible in policy and economic analysis.

• Regulatory ambiguity (pre-2020 India ban) reinforces informality and vulnerability.

• Recognizing surrogacy as informal work calls for legal and social interventions to empower women.

Commercial Surrogacy in India: Jana & Hamner (2022)

• Analyzed commercial surrogacy in north India through a feminist political economy lens.

• Surrogacy is virtualized as reproductive labor contributing to value production.

• Women’s bodies become sites of value generation under capitalism, facilitated by technologies and flows from the Global North.

• Surrogates, mostly migrant women with low education, have limited bargaining power; intermediaries and clinics exercise control.

• Regulation and state prohibition exacerbate inequalities.

Policies and Impacts

• Surrogacy policy shifted over time: 1990s—medico-liberal, contract-based; 2015—familial model restricting foreign access; January 2020—comprehensive ban on commercial surrogacy.

• Bans risk pushing the industry underground or abroad, potentially worsening conditions.

Experiences of Surrogates

• Surrogacy functions as a survival strategy or temporary livelihood.

• Surrogates navigate stigma, emotional and physical labor, and complex identities as mothers, workers, and participants in a commercial industry.

• Women exercise agency within structural constraints.

Debate on Banning Surrogacy

• Banning does not stop exploitation; may exacerbate vulnerability.

• Recognizing surrogacy as legitimate reproductive labor and empowering surrogates through labor protections is more effective.

Key Takeaways

• Women's informal work in the global south is essential but often invisible and unprotected.

• Informality includes diverse forms of employment, casual labor, domestic work, and even informal jobs in formal enterprises.

• Formalization is complex: can improve conditions if inclusive, but may harm women if poorly designed or enforced.

• Gender shapes both participation in informal work and the outcomes of formalization policies.

• Commercial surrogacy exemplifies reproductive labor, reflecting patterns of economic vulnerability and commodification.

• Recognizing and protecting informal reproductive labor is key to gender equality, empowerment, and decent work.

Discussion Questions

1. How do informal work and labor markets shape women’s economic opportunities in the global south?

2. In what ways can formalization help or harm women in informal work?

3. How does commercial surrogacy illustrate broader patterns of informal reproductive labor?

4. What kinds of legal, social, and policy interventions could effectively empower women in informal work?