Work beyond employment: representations of informal economic activities

Abstract

For much of the previous century, the informal sector was largely represented as a residue of a previous mode of production confined to marginal populations and gradually disappearing due to the inevitable and natural shift towards the formal economy across the globe. Over the past quarter of a century, however, articles published in Work, Employment and Society have been at the forefront of re-reading the informal sector. This article reveals how this body of literature has shown informal economic activities to be a persistent and ubiquitous feature of the economic landscape, mapped the complex and variable dynamics of formal and informal work in different populations, transcended simplistic universal structure/agency explanations for the persistence of informal work by developing context-bound understandings, and challenged the formal/informal dichotomy which represents the formal and informal sectors as separate hostile worlds. The article concludes by highlighting some possible future directions for research on this topic.

Keywords

dual economy gender housework informal economy informal employment underground economy uneven development unpaid work voluntary sector work organization

Introduction

Given that a greater proportion of working time is spent engaged in informal economic activities than in formal employment (Gershuny, 2000; Jütting and Laiglesia, 2009), understanding this sphere is essential if the organization of work is to be fully comprehended. Traditionally, Work, Employment and Society has been a principal outlet for the highest quality research on this topic. The aim of this e-special is to showcase a selection of this body of work so as to display how many of the articles published in this journal have transformed the way informal economic activities are theorized, measured and treated in policy-making. In this introductory overview to the e-special, we synthesize the findings of the wide range of articles on informal economic activities published in the journal. In doing so, the aim is to chart the significant advances made in understanding informal economic activities, ranging from unpaid domestic work through voluntary and community activity to undeclared work, and to discuss some possible future directions for research on this topic.

At the outset, however, what is meant by informal economic activities needs to be clarified. This residual catch-all umbrella category includes all work that is not ‘formal employment’, by which is meant paid work registered with the state for tax, social security and labour law purposes. The result is that multifarious work practices are brought together under this heading. To differentiate these heterogeneous practices, three broad forms of informal work have been commonly distinguished. First, there is ‘unpaid domestic work’ which is the unpaid household work undertaken by household members for themselves or for other members of their household. Second, there is ‘unpaid community and voluntary work’, which is unpaid work conducted by household members by and for the extended family, social or neighbourhood networks and more formal voluntary and community groups. Third and finally, there is ‘undeclared work’ which is monetized exchange unregistered by or hidden from the state for tax, social security and/or labour law purposes but which is legal in all other respects. Below, the contributions articles in the journal have made to advancing knowledge on all these forms of work, as well as the relationship between formal and informal work in different contexts, will be evaluated.

Re-placing informal economic activities

Throughout much of the 20th century, the near universal belief was that there would be an inevitable, natural and unstoppable universal shift of work from the informal into the formal economy. Informal economic activities were consequently represented as a leftover from an earlier mode of production and their continuing presence taken as a sign of ‘under-development’, ‘traditionalism’ and ‘backwardness’. Over the past quarter of a century or so, however, Work, Employment and Society has been at the forefront of re-reading the organization of work in global perspective, displaying how informal economic activities are a persistent feature of the contemporary economic landscape and widely used not only in the western world (Warde, 1990; Williams and Windebank, 2002) but also in post-socialist societies (Pickup and White, 2003; Stenning, 2005) and the ‘majority’ (third) world (Hill, 2001).

For many years, this persistence of informal economic activities was explained either from a structuralist perspective to be a direct result of surplus labour being off-loaded onto the informal economy where they pursue survival practices in the absence of alternative means of livelihood, or from a more agency-based perspective as a freely chosen alternative to participation in formal employment. However, many articles published in Work, Employment and Society have begun to transcend this either/or approach of structure versus agency. Studying English urban localities, Williams and Windebank (2002) reveal how although deprived populations are more likely to conduct informal work as a survival practice, in affluent populations such work is more likely to be freely chosen, enjoyable and rewarding in nature. Given that relatively affluent populations also undertake more self-provisioning, voluntary and community work and undeclared work than relatively deprived populations, uneven development has been thus portrayed not as a polarization between more formalized populations and more informalized populations, but as a polarization between ‘fully engaged’ populations with multiple formal jobs and high levels of engagement in informal economic activities, and ‘dis-engaged’ populations excluded not only from formal work but also informal work due to their lack of resources, skills and networks (Clarke et al., 2000; Morris, 1987; Pickup and White, 2003; Williams and Windebank, 2002).

The recognition, therefore, has been that no one representation of informal economic activities is always valid but instead different explanations are valid useful varying contexts. With this in mind, attention here turns towards the advances made in understanding the different forms of informal work.

Unpaid domestic work

Over the last quarter of a century, many of the articles published in Work, Employment and Society on informal economic activities have focused on unpaid domestic work. The majority of these articles, recognizing the persistence of gender divisions of labour in society, have concentrated on evaluating the gender divisions of unpaid domestic labour (Baxter, 1992; Bond and Sales, 2001; Charles and James, 2005; Cousins, 2004; Craig et al., 2010; Crompton et al., 2005; Kan, 2008; Kitterød and Pettersen, 2006; Punch, 2001; Speakman and Marchington, 1999; Van der Lippe, 2007; Warde and Hetherington, 1993; Windebank, 2001). Indeed, this topic has been prominent from the very first issue of the first volume of the journal (Morris, 1987) until the present day (Craig and Powell, 2011).

The overarching finding is that the gender divisions in unpaid domestic work are proving intransigent to change, whatever type of welfare regime is considered. Even in Norway, Kitterød and Pettersen (2006) show that despite strong work-family policies to enhance fathers’ family role, full-time employment for the mother does not increase the father’s contribution in any type of family work. Instead, there is a need to rely on external providers to substitute for the mother’s absence. Windebank (2001), examining France and Britain, similarly shows that women remain responsible for the vast amount of unpaid domestic work and that although men might help out to a slightly greater extent than in the past, men largely still do not take responsibility for organizing such work.

Where women manage to reduce their domestic workload, therefore, it is largely because women outsource the work to other women. One outcome has been a growing interest in the trend towards outsourcing. Examining this in Australia, Bittman et al. (1999) find that neither the modernization thesis which depicts the widespread formalization of domestic services, nor the self-servicing thesis (Gershuny, 1978) which depicts greater levels of self-provisioning, is universally valid. Instead, they identify diverse trends with some household tasks being increasingly externalized (e.g. child-care) and others increasingly in-sourced (e.g. laundry).

Voluntary and community work

The growing desire to replace public-sector provision with voluntary and community-sector provision (Cunningham and James, 2009), as exemplified by recent adoption of the ‘Big Society’ theme by the UK Conservative/Liberal Democrat coalition government, clearly signals the current importance of understanding the dynamics of voluntary and community work.

Indeed, in an age in which myriad forms of unpaid community and volunteering endeavour persist and new forms are emerging (e.g. unpaid internships), understanding this sphere is becoming increasingly salient. For many years, it was perhaps assumed that voluntary and community work is a chosen endeavour. In a study of volunteering in Canada, however, Baines (2004) reveals that the volunteer labour of paid employees operates along a continuum with ‘compulsion’ at one end and ‘coercion’ at the other. As Arber and Ginn (1995) show, meanwhile, not only is voluntary and community work heavily gendered but when women take on informal volunteering responsibilities, it does not reduce their labour force participation. It simply reduces the hours spent in formal employment, not overall participation rates. Nevertheless, the net outcome of combining paid employment and such informal caring responsibilities results in very high total working hours when both their informal and formal work is included.

There are also differences in participation across lower- and higher-income populations. Higher-income populations engage in more voluntary and community work than lower-income populations (Williams and Windebank, 2002). A number of articles have therefore sought to evaluate what might be done to tackle the exclusion of populations from such networks of community solidarity. These have resulted in new strategies for tackling social exclusion other than the employment-centred approach which simply seeks to insert people into formal employment in order to promote social inclusion. Recognizing how many are excluded from embedded and interconnected relationships which they can draw upon for help (Huang, 2008; Parry, 2003), various policy interventions have been evaluated that seek to re-embed such excluded groups in networks of social support, such as Local Exchange Trading Schemes (Aldridge et al., 2001; Seyfang, 2001; Williams, 1996) and basic income schemes which seek to provide people with an access to a guaranteed minimum income so that they can then choose how to combine formal and informal work so as to secure their livelihood (McKay, 2007).

Undeclared work

Similar to voluntary and community work, undeclared work is also currently at the top of public-policy agendas as governments seek to narrow the ‘tax gap’ in response to the recent fiscal crisis. Understanding its character and the motives underpinning it is essential if ways of tackling it are to be developed. The journal again has a long history of publishing seminal articles that unravel the nature of, and rationales for, undeclared work (Ahmad, 2008; Geetz and O’Grady, 2002; Hill, 2001; MacDonald, 1994; McGrath and DeFilipis, 2009; Pollert, 2003; Ram et al., 2001; Round et al., 2008; Thomas, 1988).

The article by Thomas (1988) on the ‘black economy’ (a term now fallen out of use due to its racist connotations) was one of the first to call for greater use of direct survey methods for evaluating its extent and nature, and also to argue that it is easier for employed people to engage in undeclared work than unemployed people and thus that governments could not simply cut welfare benefits based on the rationale that the unemployed are getting by on the black economy. This led to a raft of small-scale direct surveys of informal employment (MacDonald, 1994, 1996; Round et al., 2008; Williams and Windebank, 2002) which revealed how the unemployed are not getting by on the informal economy and how higher-income populations conduct more undeclared work and for better pay than lower-income populations.

Indeed, nuanced understandings of different population groups have now started to emerge. Ahmad’s (2008) account of the low paid exploitative work conducted by London’s Pakistani (illegal) immigrant population, has shown how structuralist accounts, depicting such work as necessity-driven, are valid, as do Geetz and O’Grady’s (2002) study in relation to young homeless workers. In Ukraine, however, more agency-based accounts have been validated by showing how undeclared work is more a voluntarily chosen alternative to the formal economy due to the corruption and bribes that are an inherent part of formal employment in this post-socialist society (Round et al., 2008).

Beyond the formal/informal economy dualism

For many decades, the formal and informal economies were represented as separate realms and hostile worlds. In recent years, this has begun to be contested. Not only have most of the articles discussed above challenged the temporal separateness of these realms by depicting their co-existence in the present, but also their normative separateness has come under assault. Rather than depict all formal work as possessing positive qualities and informal economic activities as always possessing negative qualities, it has been widely shown in the journal that not all formal work is progressive (e.g. zero-hours contracts, false self-employment) and neither are informal economic activities necessarily always regressive (e.g. volunteering, reciprocity). So too has it been revealed how workers, enterprises or populations do not always work either informally or formally but instead often operate simultaneously in both spheres (Baines and Wheelock, 1998; Round et al., 2008; Stenning, 2005).

Until recently, however, few challenged the assumption that a job is either formal or informal, but never simultaneously both. A seminal article by Woolfson (2007), nevertheless, reveals that some formal employees receive from their formal employer not only a declared salary but also an additional undeclared (‘envelope’) wage. Rather than study merely wholly ‘undeclared work’ where employers pay workers all their wages off the books, a new hybrid category of quasi-formal employment or ‘under-declared’ work has begun to be recognized, where a portion of the wage paid to formal employees by formal employers is in the form of an informal ‘envelope’ wage. This has led to a move beyond the long-standing belief that formal and informal jobs are separate and discrete, displaying how informal and formal employment is sometimes embodied in the same job in contemporary capitalism, along with how informality has permeated the formal economy.

To transcend the simplistic dichotomous depiction of separate formal and informal economies, and portray in a more nuanced manner the multifarious forms of labour in contemporary society, Taylor (2004) develops the ‘total social organization of labour’ (TSOL) approach of Glucksmann (1995). Rather than portray work as either formal work or informal work, she constructs a continuum of labour practices according to their degree of formality and this continuum is then cross-cut by whether the labour is paid or unpaid. She then uses this to distinguish six labour practices in relation to care work but which are more broadly relevant: paid employment (e.g. paid care assistant), formal voluntary work (e.g. formal unpaid work in the private, public or voluntary sector), informal unpaid work (e.g. unpaid care for a sick neighbour), paid informal work (e.g. paid babysitting), paid labour within the family (e.g. paid babysitting within the family) and unpaid domestic work (e.g. unpaid care for a sick relative). The outcome has been to highlight a borderless continuum of practices which overlap and seamlessly merge as one moves along the formal/informal spectrum. This offers much promise for future studies of work organization. One future development, however, might be to also recognize that the cross-cutting paid/unpaid dualism is also a spectrum (rather than dualism) ranging from wholly non-monetized, through gift exchange and in-kind labour, to wholly monetized labour practices.

Conclusions and future directions

Although nearly all the advances discussed above result from articles published in Work, Employment and Society, it has been necessary to reduce the articles included in this e-special down to 11 (Arber and Ginn, 1995; Baines, 2004; Bittman et al., 1999; Kitterød and Pettersen, 2006; MacDonald, 1994; Pickup and White, 2003; Taylor, 2004; Thomas, 1988; Williams and Windebank, 2002; Windebank, 2001; Woolfson, 2007). These 11 articles have been chosen because they provide examples of how the journal has advanced thought on all of the themes discussed, namely replacing informal economic activities, unpaid domestic work, voluntary and community work, undeclared work and transcending the formal/informal economy dichotomy.

This subject is of growing importance. Governments throughout the world are currently asking questions about the ability of the voluntary and community sector to act as a substitute for the public (and even private) sectors in delivering work and welfare needs, and undeclared work is rising to the top of the public-policy agendas as governments seek to reduce the tax gap. The significant advances made in understanding informal economic activities can feed into these policy debates. Whether analysing unpaid domestic work, voluntary and community work, undeclared work, or the informal sector as a whole, a body of work has not only started to map the complex and variable dynamics of work organization in different populations, and transcended the use of simplistic universal structure/agency explanations for the persistence of informal work through the development of context-bound understandings, but also challenged the formal/informal dualism that represents the formal and informal sectors as separate realms and hostile worlds. However, much important research still needs to be undertaken, not least to translate these theoretically informed advances into practice-oriented and policy relevant knowledge. Here, we chart some fruitful potential directions for future research.

First, understanding uneven development from a ‘whole economy’ perspective is of great importance because it shows that economic development cannot be simply equated with formalization and reveals the need for finer grained debates about the nature and direction of economic development that pursue a more ‘pick and mix’ approach towards various types of informal (and formal) work. The non-academic impact could be significant since few, if any, governments have yet moved beyond a formal employment-centred discourse when discussing economic development.

Second, and on unpaid domestic work, little attention has so far been paid to unpacking the extent of, or barriers to, the outsourcing of the domestic workload. Given that it is now accepted that formalization is not inevitable and natural, and that self-servicing persists, greater attention will need to be paid to developing more complex accounts of what is being formalized and the barriers to formalization. So too is there a need to more fully understand the motivations for both outsourcing and self-servicing/in-sourcing. Until now, the reasons are poorly understood, especially in terms of how they vary across populations and groups.

Third, the greater use of the voluntary and community sector as a substitute for state provision again necessitates the development of more nuanced understandings of the degree and nature of engagement of various populations in such endeavour and the different barriers to participation in voluntary and community work among different groups. Unless these are more fully understood, policy interventions to tackle the limited participation of some groups cannot be addressed. Moreover, the capacity of different segments of the voluntary and community sector to stand alone with only limited support from the public sector needs to be seriously evaluated, as does the issue of how to nurture the more informal modes of voluntary and community sector provision, which have been neglected both in terms of research and policy interventions.

Fourth, greater recognition is required of the diverse array of forms of undeclared work, ranging from paid favours for closer social relations (displaying the monetization of reciprocity), through informal entrepreneurship to exploitative waged work and envelope wages, and for discussions to occur of how policy needs to adopt more nuanced policy measures rather than adopting a ‘one size fits all’ approach. Even more importantly, the barriers to formalization remain under-researched, particularly how these vary across societies and populations. Until they are understood, it will be difficult to know what mix of policy measures is required and how they need to be tailored to different contexts.

Fifth and finally, and more theoretically, it is perhaps time to transcend the formal/informal economy dualism, not by dropping discussion of formal and informal economic activities but by recognizing the borderless and seamless fluidity of work practices on a spectrum from wholly formal to wholly informal cross-cut by a similar spectrum from wholly monetized to wholly non-monetized exchanges. This will then enable more nuanced accounts of the relations within which work is embedded. Rather than debate whether to formalize (or informalize) work, premised on the assumption that these are separate hostile worlds, it could then start to be debated what work practices might be nurtured and to develop more refined views of the way forward rather than simply assert that ‘formal’ work is progressive and ‘informal’ work is regressive.

In sum, by synthesizing the high-quality published work on this subject in this introductory overview, it is hoped that we have clearly revealed both how the journal has long been one of the primary publishing outlets for research on this topic and how the body of work so far published in the journal has transformed the ways in which informal economic activities are theorized, measured and treated in policy-making. If this e-special encourages new submissions and helps the journal continue in its position as one of the primary outlets for the highest-quality research in this field, then it will have fulfilled its objective. We hope you enjoy the collection of articles and that it stimulates further reflection and research on this important subject.

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