In recent years, there has been a shift from a policy approach that seeks to eradicate the informal economy and move towards an approach that seeks to enable the formalisation of informal work. However, there is a small emergent view that people should be left alone to work in the informal economy. What are the possible rationales for this policy approach?
When a task is undertaken in the informal economy (or the amateur economy) the acitivity has a value in itself which generates more satisfaction than does a paid job, but usually the output per hour in the amateur economy than in the paid job (the professional economy) and with less output per hour follows les throughput in genral, and thereby less environmental impact, but, as mentioned, more satisfaction and happiness. in other words: the amateur economy (the informa or voluntary economy) is more efficient in turning resource use into happiness, and this is what a real economy should be about.
This is an interesting answer that work in the informal economy produces greater satisfaction and happiness. Do you know of any studies which have empirically investigated this? My own view is that there is a need to disaggregate different types of informal work. Do-it-yourself activity (non-routine home improvement work) might generate greater satisfaction and happiness, as might some forms of voluntary work and informal self-employment, but this might not be the case with routine (unpaid) domestic work, paid domestic service work, and other forms of waged informal employment, especially when conducted under exploitative conditions for low pay. It is similarly the case with work in the formal economy. Different types of formal employment probably lead to greater satisfaction and happiness than other types. For me, therefore, there is a need to move beyond a formal/informal dualism and differentiate the different types of work on each side.
This is a fascinating subject, namely that some forms of informal work result in greater happiness. I would like to hear more about your hypotheses. I also agree about the transition economies being a useful laboratory and very different from other developing countries due to their history. Indeed, i have just finished a book entitled The Role of informal economies in the post-Soviet World (2013, Routledge) which starts to address this issue.
My above response had a serious mistake, so that the point, that the amateur economy in general has a lower productivity than that of the professional economy, was missing. I have in my writing defined what I call "Amaterur Economy" as the economy, in which work is carried out because people like to do it (Amateur is derived form amour=love) not because they are compensated by money etc. See my paper:" Happy Degrowth through more Amateur Economy" in Journal of Cleaner Production, 38 (2013) 61-70.
I agree with Marijana. The move has to be away from thinking formal/informal. Why should people continue in the informal economy?......because it is their natural place of work! often historically so. The Supreme Court of India acknowledged the same. The demarcation of 'informal' and 'formal' comes from the taxation and other regulatory requirements. Maybe the authorities need is to find new ways and processes to deal with the informal economy, rather than trying to change the informal economy to fit their slots/definitions.
I agree with most of the postings here. Results emerging from my study of the Nigerian informal economy shows that people engage in the informal economy for many reasons. These provide justifications for allowing these individuals to work in the informal economy. #link to this work shall be provided, as soon as it is published #
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