Informal Women Workers in the Global South: Policies and Practices for the Formalisation of Women’s Employment in Developing Economies

edited by Jayati Ghosh, Routledge, 2021

Reviewed by Françoise Carré and Martha Chen

Jayati Ghosh, the editor, and the chapter authors of this important volume address the challenges raised for women informal workers in developing countries by government policies that aim to ‘formalise’ the informal economy. Informal employment is the primary form of employment for both women and men in the developing world, and represents a larger share of women’s, than men’s, employment in developing countries and in a majority (56 per cent) of countries worldwide.

Informal employment includes the following: first, employers and own-account operators (selfemployed without employees) whose enterprise is not legally incorporated nor registered with national authorities (in what is called the ‘informal sector’); second, all employment not covered by work-related social protection for formal firms, informal enterprises, and households. Globally, about 60 per cent of all employment is informal. Informal workers face greater deficits than formal workers in the four pillars of decent work: economic opportunities, legal rights, social protection, and voice in social dialogue. Within informal employment, women tend to be concentrated in the lower-earning and more disadvantaged segments.

The most common public policy response to the informal economy is ‘formalisation’. Historically, formalisation policies focused on the self-employed in informal enterprises but increasingly they include informal wage employment, both inside and outside informal enterprises. Formalisation aims to apply regulations to informal-sector firms and informal wage employment. These regulations can include: negative policies (with costs and risks but no benefits or rights for informal enterprises or workers) and positive policies (with benefits, rights, and protections, and lowered costs of formalisation in return for compliance); or a mix of both. Informal Women Workers in the Global South examines experiences with varied formalisation approaches in five countries over the last decade. Some of these approaches draw upon long-standing types of policy, while others involve initiating policies prompted by International Labour Organization (ILO) Conventions (e.g. Convention 189 for domestic work) and the ILO Recommendation for the transition from the informal to the formal economy (Recommendation 204).

In the excellent Chapter 1, the introduction to the book, Jayati Ghosh’s sober assessment is that most formalisation policies come up short in terms of scope, implementation, and enforcement in large part because of a lack of understanding of the economic realities faced by informal workers and their businesses. Importantly, policies fail to take into account the diverse nature of those involved in informal work, with disparities relating to gender, class/education, and ethnicity often ignored. Some formalisation policies even reflect ambivalence about the role of informal activities altogether, sometimes coming close to prohibiting them (e.g. street vendor evictions).

These country chapters provide in-depth analyses of macro-economic and labour market conditions, as well as the actual and potential impacts on women informal workers of recent formalisation policies in the five countries. The incidence of informal employment in total employment ranges greatly across these countries from 90 per cent (India, Ghana) to 18 per cent (South Africa). Labour market conditions also vary (employment growth versus stagnation; high versus low unemployment) but in all countries bar one the share of informal employment in total employment has increased over the past 10–15 years. Where it was expected to decline with recent economic growth – in Thailand – it is still over half of total employment. The rate of labour force participation of women ranges from 80 per cent in Ghana (on a par with men) to 21 per cent in Morocco (about 40 percentage points lower than men). These and other differences in economic structure and institutions provide the backdrop to the formalisation policies being implemented by the respective governments.

The types of informal workers subject to the formalisation policies discussed in the volume include contract farming (Ghana); domestic workers (Morocco, South Africa); informal artisanal miners (South Africa); home-based workers (South Africa); informal workers in the formal sector (Morocco); street vendors, market traders, and other micro-entrepreneurs (Ghana, Morocco, South Africa, Thailand), and waste pickers and reclaimers (South Africa). Women predominate among domestic workers and home-based workers and (in Africa) among street vendors and market traders. The types of formalisation policies range from structural reforms (demonetisation in India), to tax reforms (Ghana, India) and tax abatements as incentives to hire workers formally (Morocco), to fostering integration in global production (Ghana), as well as extension of social protection to all informal workers (India, Morocco, Thailand), of labour rights to domestic workers (Morocco), and of financial and business training services to the informal self-employed (Ghana, India, Morocco).

In her concluding thoughts (Chapter 1), Jayati Ghosh provides another useful typology for considering formalisation processes in regard to their likely or actual impact: structural transformation that generates more formal employment; ‘false formalisation’ whereby informal firms, workers, and activities are ‘subsumed by formal enterprises as part of their accumulation strategies’ (p. 8); a ‘reverse’ trajectory whereby formal firms, notably their hiring practices, become more informal; and ‘desirable’ formalisation whereby the economic viability of informal enterprises and informal wage jobs are enhanced.

Jayati Ghosh calls for recognising what genuine progressive formalisation means for informal enterprises and workers: namely avoiding oppressive or punitive regulation, promoting universal social protection, and supporting worker mobilisation and organisation. Jayati Ghosh also highlights the importance of addressing both the macro-economic context and the micro-social and cultural context, notably gender norms and relations. As Jayati Ghosh underscores, formalisation policies are likely to have differential impacts on women and men workers given their different initial conditions: women tend to have fewer property rights, less access to credit and public services, and greater social constraints than men. She cautions against over-regulation, with which women informal workers would find it difficult to comply, and legal rigidities, which may not suit women’s needs for flexible working conditions.

To this excellent penetrating analysis, we would add three additional observations. First, specific sectors or occupations of informal workers, both women and men, may be differentially affected by formalisation policies due to their place of work or status in employment: e.g. domestic workers are mainly wage workers; street vendors and waste pickers are mainly self-employed; and home-based workers are self-employed or dependent contractors in supply chains. Second, women and men within specific sectors or occupations may be impacted differently depending on the specific goods or services they provide: e.g. women street vendors are more likely to sell perishables (fresh and cooked food) while men are more likely to sell consumer durables. Lastly, both women and men informal workers are likely to have limited access to credit and public services, and to have limited or no property rights if they live in informal settlements. To understand the impact of formalisation and other policies on women informal workers, intersectional analysis is needed that takes into account gender similarities within specific sectors or occupations of informal employment (by reason of being informal); the specific conditions and constraints of women informal workers (by reason of their gender); and constraints that all informal workers from particular race/ethnic, caste, or religious groups or all informal workers who live in informal settlements
face.

Readers interested in the quality of women’s employment in developing countries and the role of national and local policies in improving or undermining employment and livelihoods will benefit from this realistic assessment. They will gain a nuanced understanding from the crossnational analysis of the opportunities and obstacles faced by informal workers, what policies make for progressive formalisation, and the importance of taking into account the context for women’s informal work. This book is an excellent resource for those concerned with informal employment in general, and women informal workers in particular. The book is a very useful resource for feminist economists and others in the field of gender and development. Importantly, it also offers accessible analyses and critical perspective about informal work and public policies to readers seeking exposure to the main economic and policy challenges faced by women informal workers. Chapter 1 lays out clearly what is at stake for women informal workers and provides a context for recent formalisation approaches, while country chapters ground the issues in specific occupations in informal work and markets. The book is structured in a way to guide the general reader through the nuances and complex institutional, social, and economic dimensions of women’s informal work, the prevailing form of employment in the developing world.