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Appears in Collections:Economics Working Papers
Title: Welfare and the depth of informality: Evidence from five African countries
Author(s): Egger, Eva-Maria
Poggi, Cecilia
Rufrancos, Héctor
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Citation: Egger E, Poggi C & Rufrancos H (2021) Welfare and the depth of informality: Evidence from five African countries. UNU WIDER Working Paper Series, 25/2021. UNU WIDER Working Paper Series.
Keywords: informality
social protection
sub-Saharan Africa
JEL Code(s): H55: Social Security and Public Pensions
I31: General Welfare; Well-Being
J46: Informal Labor Markets
J88: Labor Standards: Public Policy
Issue Date: 1-Feb-2021
Date Deposited: 11-Jan-2022
Series/Report no.: UNU WIDER Working Paper Series, 25/2021
Abstract: This study explores the relationship between household poverty and depth of informality by proposing a new measure of informality at the household level. It is defined as the share of activities (hours worked or income earned) without social insurance for wage workers in the household. We apply cross-sectional regressions to five urban sub-Saharan African countries, showing that a household head informality dummy obscures a non-linear relationship between the depth of household informality and welfare outcomes. In some countries, a small share of income from formal jobs is associated with at least the same welfare as a fully formal portfolio. By assessing transitions between household portfolios with panel data for urban Nigeria, we also show that most welfare differences are explained by selection and that movements in and out of formality cannot sufficiently change welfare trajectories. The results call for better inclusion of informal profiles to social insurance programmes.
Type: Working Paper
Rights: The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.
Affiliation: Economics
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