Workers and Labour Market Outcomes of Informal Jobs in Formal Establishments: A Job-Based Informality Index for Nine Sub-Saharan African Countries

Abstract

How can an informal job in formal establishments be defined, who has an informal job and what are the labour market outcomes? This chapter uses data of comparable face-to-face surveys in nine countries: Benin, Ghana, Guinea, Kenya, Madagascar, Niger, Rwanda, Senegal and Togo. An index for job-based informality is developed, based on employment status and contribution and entitlement to social security. Young and low-educated workers are more likely to hold informal jobs; even more so are workers in small enterprises, in trade, transport and hospitality, and in unskilled occupations, while workers in skilled occupations and with high education are less likely to hold informal jobs. No evidence is found regarding gendered effects. The more informal, the poorer the labour market outcomes: wages are lower, while the chances are higher of being paid below the minimum wage, working more than 48 hours, and not being covered by a collective agreement.