Perceptions and Motivations

This is a page on perceptions and motivations of informality.

Learning Circle 1

On March 24, 2021, the UNDP Accelerator Labs hosted its first learning circle on informality to address the following key learning questions:

- How do informal workers see themselves?

- What are the motivations for doing this work?

These reflections come from 16 UNDP Accelerator Labs (Colombia, Nepal, Uganda, Guinea, Bangladesh, Morocco, Guatemala, Peru, Cambodia, Philippines, Cabo Verde, El Salvador, Paraguay, Mauritius, Nigeria, Panama, Libya, Barbados, Viet Nam). The documentation of this session forms the basis of insights meant to unpack the drivers and dynamics of informality, and is supplemented iterative learning from continuous reflection available at acceleratorlabs.undp.org.

Access the Mural here.

Informality is a feature, not a bug

The average size of the shadow economy of the 158 countries over 1991 to 2015 is 31.9 percent. The largest ones are Zimbabwe with 60.6 percent, and Bolivia with 62.3 percent of GDP.

Zimbabwe has the world’s second largest informal economy with over 60% of the population relying on informal activities for their source of income.

According to the Zimbabwe 2014 Labour Force Survey, 94.5% of employment in the country is informalized

Informal employment is a greater source of employment for men (63.0 per cent) than for women (58.1 per cent). Out of the two billion workers in informal employment worldwide, just over 740 million are women. Women are more exposed to informal employment in most low- and lower-middle income countries and are more often found in the most vulnerable situations.

Amadou to fill in with few more African examples.

What drives/ motivates people to work informal jobs?

For many, informality is a pragmatic opportunity as no other alternatives are available when people do not hold a formal education, are unemployed and are living in vulnerable socio-economic situations. Their main motivation in getting an informal job is to survive, earn a living and for a few, the hope of a safer future. Policy prescriptions often focus on protection for all workers, including those in precarious and/or informal settings.

The challenge is that informality is often entrenched such that it is not represented in data, and those in informal jobs do not want exposure to policy out of fear of repercussion. In order to open up policy discussions, this entry is meant to document motivations to understand drivers, some of which may appear as active choices, which is not necessarily the case or the intent. Rather, the idea of exploring motivations is to also see the potential creativity, ingenuity and innovation in informal sectors given their predominance and in some cases growth in developing countries.

Discussions via learning circles among the UNDP Accelerator Labs unearthed drivers for informality, namely four perceptions beyond exigency: flexibility, freedom, agility, and self-organization. From our Lab members’ experiences, 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 may partly explain why informality is predominantly associated with female workers in Africa and Latin AmericaTemplate:Citation needed. Freedom in this context is 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, where informal workers integrate and collaborate amongst each other they are able to adapt quicker and pivot their services to market needs. A typical example of these self-organized groups are informal waste pickers or informal market vendors/food producers.

An example of agility is in Ghana where informal collection is a very popular option for waste disposal. A frequent narrative is that high unemployment and the relatively low start-up costs of informal waste-collection attract the unemployed to waste-collection – a positive outcome for employment. Competition among waste-collectors then drives costs to residents down – also a positive outcome for the community, but with unintended consequences.

An example of freedom can be found among waster pickers in Viet Nam. They are diverse individuals, very often women who take this job due to its freedom, allowing them to supplement their income while having other commitments. Some work on the street to pick up trash, some work at scraps shops to trade valuable waste, other work as business owners as part of the waste supply chain.

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. Template:Citation needed

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. Informal workers in vulnerable settings seem to not benefit as much from the positive aspects of informality.

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 necessarily perceive themselves as informal. Hence the binary categorization of formal/informal is not always an appropriate approach to understand the perceptions of formality.

We cannot also assess informality only as employment. It is also an ecosystem of services that add value to the market, to its citizens and has a key role in satisfying needs unmet by the traditional market and/or government services.

//need some digging + importance of cultural transmission, informality as a way to shape ones identity Two separate points here: naming as informality and perception of formality + perception of the informal workers on formal economy//

This excerpt is also potentially relevant to: Equity