The Determinants of Labor Supply of Informal Sector: Two Hypotheses on Self-Employment

2018 ◽  
pp. 139-177
Author(s):  
Xinxin Ma
Keyword(s):  
Labor Supply ◽  
Informal Sector ◽  
Self Employment

Internal remittances and employment choices in rural Ghana

2020 ◽  
Vol 11 (3) ◽  
pp. 505-524
Author(s):  
Stanley Kojo Dary ◽  
Yazidu Ustarz
Keyword(s):  
Labor Supply ◽  
Rural Areas ◽  
Instrumental Variable ◽  
Content Type ◽  
Rural Ghana ◽  
Self Employment ◽  
Variable Approach ◽  
Negative Effect ◽  
Household Heads ◽  
Employment Choices

PurposeThe paper examines the effect of internal remittances on the employment choices of household heads in rural Ghana.Design/methodology/approachThe paper employs data from the Ghana Living Standards Survey (GLSS 6) of the Ghana Statistical Service. Due to issues of endogeneity of remittances in relation to labor supply, the paper adopts an instrumental variable approach in the analysis. First, employment choices are categorized into three: (1) wage/salary employment, (2) self-employment and (3) domestic/family employment. The relationship is then modeled as instrumental variable multinomial probit (IV-MNP). Secondly, employment choices are recategorized into two: farm employment and otherwise and modeled as instrumental variable probit (IV-PROBIT). The models are estimated via the conditional mixed process (CMP) estimation technique.FindingsThe results indicate that remittances have a negative effect on self-employment and a positive effect on domestic/family employment. Thus, remittances reduce participation in self-employment but increase participation in domestic/family employment. Furthermore, remittances have a negative effect on participation in farm employment. The results are robust to different measures of remittances: receipt of remittances (dummy) and remittance income.Practical implicationsThe results suggest that remittances are used for consumption rather than investing in earning activities. In general, engaging in earning type of employment, whether farm and nonfarm employment will decline with receipt of remittances in rural Ghana. There is a need for policy attention with the increasing migration of people out of rural areas.Originality/valuePrior to this study, little was known on the effect of internal remittances on labor supply decisions of remittance recipients in Ghana, particularly rural Ghana. This paper contributes significantly to filling this knowledge gap.

The Informal Sector and Zambia's Employment Crisis

1980 ◽  
Vol 18 (3) ◽  
pp. 411-425 ◽  
Author(s):  
David M. Todd ◽  
Christopher Shaw
Keyword(s):  
Informal Sector ◽  
Educational System ◽  
Urban Areas ◽  
Labour Force ◽  
National Development ◽  
Reliable Information ◽  
Self Employment ◽  
Wage Employment ◽  
The Unemployed

Late in 1979 the Zambian Government unveiled its Third National Development Plan which will guide policies until the year 1984, and this implies that problems of unemployment, particularly in urban areas, will be partly overcome by an expansion of self-employment possibilities.Such was the enthusiasm for the new initiative that the absence of reliable information surrounding it was largely ignored. This article attempts to provide relevant data concerning a number of issues which will be vital in implementing any measures to encourage self-employment in the so-called ‘informal sector’ of the Zambian economy. In particular we shall endeavour to quantify the likely flows into the labour force, particularly from the educational system, the possible growth of formal wage employment in urban areas, and the current size and composition of the informal sector. Finally, conclusions are drawn concerning the possible rôle of this sector in absorbing the unemployed in the plan period.

EXITING POVERTY THROUGH SELF-EMPLOYMENT: THE GRAMEEN MODEL AND ROTATING CREDIT ASSOCIATIONS AS ALTERNATIVE STRATEGIES

2021 ◽  
pp. 2150012
Author(s):  
IVAN LIGHT
Keyword(s):  
Informal Sector ◽  
Financial Resources ◽  
Poor People ◽  
Resource Base ◽  
Alternative Strategies ◽  
Lower Tier ◽  
Self Employment ◽  
Credit Associations ◽  
Minimal Resource

Self-employment in the informal sector keeps poor people alive, but it rarely enables them to exit poverty. To exit poverty through self-employment, poor people require monetary and non-monetary resources which they overwhelmingly lack. To escape this dilemma, the owners of survivalist business firms need to band together in order to assemble a minimal resource base on the strength of which they can together upgrade their partnership. Because resources are scarce in poverty populations, this task is exceptionally hard to accomplish. Rotating credit and savings associations (ROSCAs) can enable individuals to exit poverty through self-employment, but ROSCAs only work in the most-resourced, upper tier of a poverty population. In the lower tier, Grameen model banks inject organizational, educational, and financial resources that enable impoverished individuals to exit poverty by upgrading a survivalist business.

Labor Market Modeling and the Urban Informal Sector: Theory and Evidence

2018 ◽  
pp. 145-172 ◽  
Author(s):  
Gary S. Fields
Keyword(s):  
Developing Countries ◽  
Labor Market ◽  
Informal Sector ◽  
Theoretical Models ◽  
Small Scale ◽  
Formal Sector ◽  
Self Employment ◽  
Wage Employment ◽  
Sector Theory ◽  
Urban Informal Sector

The purpose of this chapter is to assess the compatibility between theoretical models of the urban informal sector (UIS) and empirical evidence on the workings of that sector in the context of developing countries’ labour markets. The major point is that, although the UIS is an excellent idea which has served us well in the 1970s and 1980s, there is a need in the next round of research to refine the terminology and the models in light of empirical findings which have come to the fore in the interim. Wage employment or self-employment in small-scale units may be better than or worse than employment in the formal sector. This is not a new point: diversity of earning opportunities and other job characteristics within the informal sector has long been noted. But only recently has this view come to the fore.

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