Informal employment and the social contract
An individual-level perspective
This paper empirically tests whether individual-level informality status is linked
to a weak social contract, as measured through individual perceptions of its various
aspects. Accounting for workers’ heterogeneity and a possible simultaneity between
informality status and attitudes towards institutions, the paper shows that informal
workers are systematically more dissatisfied with the social contract, as compared
to formal workers. The paper enriches the literature by looking at a broad range of
aspects of the social contract. The results show that informality is associated with
a lower level of confidence in labour unions, in parliament, in civil services; a
lower satisfaction with the healthcare system, the way the government performs its
duties, the quality of healthcare, and the city setting. The paper concludes with
some policy implications.
Available from April 27, 2022
In series:OECD Development Centre Working Papersview more titles