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notes on informalurban livelihoods

jorge carrillo-rodriguez11th March 2013

Dimensions Lack of income and productive assets Lack of basic services Lack of power

poverty

Barriers Physical: distance, accessibility Financial: fees, regulations Legal: registrations, citizenship Socio-cultural discrimination Political

and vulnerability

Monetized economy Exclusion by design Informal costs Opportunity costs Urban penalty Eviction and environmental hazards Social capital Information

urban living

“Informality is a term that has the dubious distinction of combining maximum policy importance and political salience with minimal conceptual clarity and coherence in the analytical literature.” (Kanbur, 2009)

terms used interchangeably, i.e. informal economy, informal sector, informal employment, etc.

difficulty in identifying the boundaries between formal and informal

misconceptions on the role, contribution and impact

informality

Informal economy Informal sector Informal employment

Informal work Informal workers

Related terms Shadow/underground economy Informal settings

defining terms

finding boundaries

{Basic

{Complementary

{“Holistic”

Informality poverty Large IE = weak FE Small size limits dynamism & growth Exploitative

Safety net Low entry cost Flexible and heterogeneous Local knowledge/innovation

perspectives

Capabilities Assets (material and social) Strategies

livelihood

A livelihood is sustainable when it can cope with and recover from external stresses and shocks, maintain or enhance its capabilities and assets now and in the future while not undermining the natural resource base.

capabilities and assets

Human: skills, knowledge, ability to work, health

Financial: savings, credit, remittances, transfers

Social: networks, trust, services Physical: infrastructure, transport,

shelter

More income Increased well-being Reduced vulnerability Increased resilience Sustainable living standard

livelihood outcomes

Strategies

Mainly urban Urban and rural

Income raising

• domestic service - e.g. cleaning and childcare (esp. girls and women)

• urban agriculture • renting out rooms • multiple jobs (formal/informal)

• home gardening • processing, hawking, vending transporting

goods • casual labour/piece work • specialised occupations (e.g. tinkering, food

preparation, shoe-shining) • mortgaging and selling assets • migration for seasonal work

Lowering expenditure

• scavenging• reduce transport costs

• changes in purchasing habits (e.g. small frequent purchases, rather than cheap bulk buys, and/or poorer quality food)

• discrimination and triage (e.g. giving less food to weaker/ less favoured household members).

Social capital• shared childcare and for elders• informal worker’s associations• collective action

• mutual help e.g. loans from friends or saving groups

• family splitting• remittances from household members working

away

Worldwide: around 66% of total employment

Developed Countries: 25-40% of total employment

Developing Countries: 50-90% of total employment Highest: Sub-Saharan Africa and South

Asia (as high as 90% in many countries) Medium: South East and East Asia +

Latin America (around 65% in most countries)

Lowest: North Africa and West Asia (around 50% in most countries)

informal is normal

It does not mean Simple regulation and taxation

but also getting registered and paying taxes being covered by legal and social

protection receiving support to become productive

and remunerative becoming organized and gaining voice

and power

formalization

(Chen, 2009)

Formalizing the Informal: not just regulation + taxation but also…

assets + opportunities + productivity-enhancing support

economic rights: commercial + labor + property social protection organization and representative voice

“Informalizing” the Formal: reform of economic policies and institutions to include the informal economy/workforce as legitimate…

part of the total economy target of economic policies + incentives stakeholder in policy-making and rule-setting

institutions

new urban economy(Chen, 2009)

Thank you

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