Perceptions and Motivations

Learning Circle 1

On March 24, 2021, the UNDP Accelerator Labs hosted its first learning circle on informality. 16 Accelerator Labs joined the session, and three groups were formed to discuss certain aspects around the motivations and perceptions within the informal sector. Below summarizes the notes from the session:

Group 1: Positive Attributes of Informality

What is perceived as positive in informality, and by whom? What drives/ motivates people to work informal jobs?

The learning circle identified four positive traits that motivate people to work in informal settings. These four have been broadly categorized as flexibility, freedom, agility, and self-organization. From our Lab members’ experiences, they shared that informality enables flexibility. For example, people work in informal settings to be able to also study, start a business, take care of children, or do household chores. This insight shows some signals as to why informality is predominantly associated with female workers in Africa and Latin America. Freedom in this context, was interpreted as one’s opportunity to earn multiple income streams while agility was illustrated as one’s ability to adapt to new needs, set up a business faster, or not having to deal with bureaucracy. That agility, in many cases, leads to self-organization, considering that informal workers integrate and collaborate amongst each other, they are able to adapt quicker and pivot their services to market needs.

Early signs tell us that one’s motivation to pursue informal jobs may vary depending on one’s age, where younger workers value the agility and freedom informality brings, while older and predominantly female workers value the flexibility.

In general, we’ve seen that the insights shared can pertain to various types of informality such as informal businesses, self-employment, and informal workers. We saw patterns of how the positive traits of the informal sector are mostly associated with self employment and informal businesses. While informal workers in vulnerable settings seem to not benefit as much from the positive aspects of informality.

Moving forward, it is essential to be able to distinguish these insights based on context and the type of informality so we can articulate clearer and more cohesive learnings.

Group 2: Degrees of Informality

Is there a continuum between these aspects, or are they necessarily distinct? Are there degrees of informality?

We cannot tag informality with one size fits all, there are many ways, scales, dimensions and morphologies of informality. Informality cannot be interpreted in degrees instead, informality has multiple categories.

During the exercise, the Labs have identified at least three categories of the informal sector. The first one has to do with formality as being voluntary(chosen) or imposed. The second relates to skill or unskilled labor. Finally, informality can be considered institutionalized, or contextualized in response to a specific type of work.

Group 3: Perceptions of Formality

How do informal workers perceive more formal employment, structures, etc? What is perceived negatively in formality, and by whom?

Informal sector workers do not perceive themselves as informal. Hence the binary categorization of formal/informal is not an appropriate approach to understand the perceptions of formality.

We cannot also assess informality merely on the aspect of employment. It goes beyond, as an ecosystem of services that add value to the market, to its citizens and has a key role in satisfying unmet needs.

There is an urge to better define the entire spectrum of unregulated markets so that public policy can consider both the positive and negative aspects of informality.