Entrepreneurship at the labour market: a case of precariat and informal employment

The concept of precariat is becoming the increasingly important subject of interdisciplinary research that involves both qualitative and quantitative approaches. The formation of the precariat is associated with the neoliberal reforms carried out in the last decades, as well as significant institutional and technological changes. The process of precarisation is accompanied by an increase in insecurity, instability, and flexibility, which is most characteristic of informal and precarious work. Our paper analyzes the relationship between informal employment as a proxy precariat and unemployment rates, industrial production index and real wages using the structural VAR approach for monthly data in the period 2010-2018. The relationship between the variables is checked by imposing restrictions on the recursive scheme (Cholesky identification) as well as the recursive identification scheme (Cholesky decomposition) in the SVAR model. Our analysis of the impulse response caused by the positive shock of informal employment confirmed that in the short term, the increase in the share of people employed in the informal sector causes, above all, a decline in real wages. There are weak responses from the industrial production index, which leads to the conclusion about the leveling effect of institutions and institutions. In addition, the paper employs the process of modeling the development of informal employment using the ARIMA model. Our results showing the trends in the development of informal employment demonstrate the existence of cyclical resilience which negatively affects economic development and requires structural reforms.