Cities need to create employment
opportunities so that slum dwellers can improve their livelihoods. However, the
formal sector in developing countries like India faces resource constraints in creating new jobs. Moreover, slum dwellers
often lack the skills, education, and knowledge to access work in the formal
sector and are mostly employed in the
informal sector (Davis,
2006).
This study is an illustrative micro-level case study focusing on the
slum residents of West Bengal, India. The unit of analysis is the individual
and the study empirically investigates what kind of informal employment options
the slum dwellers have, as well as which kinds of informal employment better at
offsetting their poverty.
Informal jobs in developing countries are considered as the employment
of last resort where workers are ready to accept any wage level (Radchenko,
2017). Nevertheless, Meagher (2016)
recommends developmental efforts to expand the informal economy. It is
currently unclear what role diverse and unregulated informal employment plays in
offsetting poverty for slum dwellers (Gulyani,
Bassett, and Talukdar, 2014). So, the question arises as to which informal employment needs to be
promoted by the government to improve the livelihoods of slum
dwellers—self-employed or paid-employed jobs?
Although many have migrated to
the city to find better employment opportunities to improve their lives, slum
dwellers face socio-economic and political stressors as well as a very limited
supply of decent jobs. They struggle to find high-quality, well-remunerated,
paid jobs: even including contract wage employment, these paid jobs account for
only 15 percent of the total labour force (Fox et
al., 2017). Consequently many are forced to engage in self-employed jobs - mostly
unincorporated businesses run by household enterprises and unpaid family
members.
It is often claimed that
self-employment is beneficial due to its significant role in employment and
earning for people who would otherwise be unemployed (Fox and
Gaal, 2008). Self-employment in the urban sectors developing countries is
increasing (Kingdon
et al., 2006) and past studies found that countries with more low-paid
workers have higher capital yields as a result of having more self-employed
jobs (Banerjee
and Duflo, 2005). Moreover, the greater number of self-employed workers in
a country, the greater its increase in wealth, and the better its credit
markets and investment opportunities function (Blanchflower
and Oswald, 1998; Evans and
Jovanovic, 1989; Magnac
and Robin, 1996).
However, the causes behind the
variety of slum dwellers’ socio-economic and demographic characteristics (at an
individual level) are not well understood (Patel et
al., 2014; Sandhu,
1989; Seeley,
1959; Stokes, 1962; Van
Vliet, 1987). We can surmise that they are probably due (in large part) to
the variation in their informal jobs and their earnings. However, in trying to
understand the utility of different levels of income to slum dwellers, we need
to bear in mind that the living wage (the income required to meet subsistence
needs) varies with different social, economic and demographic characteristics (Boushey
et al., 2001; Sklar et
al., 2001). Furthermore, the living wage varies substantially across the provinces
of a country, so it is important in investigating this to also analyze how slum
dweller income from self-employed and paid informal work varies across regions.
Analytically, the study focuses
on asking: What are the informal jobs and associated income levels of slum
dwellers across districts of West Bengal? Are there any significant differences
among the respondents’ characteristics across these jobs? What role does gender
and education play for slum dwellers in shaping their ability to get different
kinds of informal employment and achieve the associated income levels?
— written by Shashwati Banerjee and Kishor Goswami drawing on their article Self-employed or Paid Employed: Who
can Earn more among the Slum Dwellers and Why? in Progress in Development Studies
Great content, thanks for sharing during these difficult times.
ReplyDeleteThis content is very helpful for the ones self employed.fitmc.com