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Financial Services and the Informal Economy

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  • Cally Ardington

    (SALDRU, School of Economics, University of Cape Town)

  • Murray Leibbrandt

    (SALDRU, School of Economics, University of Cape Town)

Abstract

This paper examines the impact of formality of employment on the utilisation of financial services, using data from the October 2000 Income and Expenditure Survey and the September 2000 Labour Force Survey. The presence of an employed member in the household is seen to be important for the utilisation of both bank accounts and funeral insurance, even after controlling for income. Furthermore there are strong links between the nature of this employment and utilisation of financial services. Employees are more likely to utilise financial services than the self-employed. Among employees, the probability of utilising financial services increases with the degree of formality of employment. These effects are stronger for formal banking services than for funeral insurance which includes informal burial societies.

Suggested Citation

  • Cally Ardington & Murray Leibbrandt, 2004. "Financial Services and the Informal Economy," SALDRU/CSSR Working Papers 066, Southern Africa Labour and Development Research Unit, University of Cape Town.
    • Handle: RePEc:ldr:cssrwp:066
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    File URL: https://www.opensaldru.uct.ac.za/handle/11090/641
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    References listed on IDEAS

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    1. Paul Mosley & Robert Holzmann & Steen Jorgensen, 1999. "Social protection as social risk management: conceptual underpinnings for the social protection sector strategy paper," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(7), pages 1005-1027.
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    3. Cally Ardington & David Lam & Murray Leibbrandt & James Levinsohn, 2004. "Savings, Insurance And Debt Over The Post‐Apartheid Period: A Review Of Recent Research," South African Journal of Economics, Economic Society of South Africa, vol. 72(3), pages 604-640, September.
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    5. Morduch, Jonathan, 1999. "Between the State and the Market: Can Informal Insurance Patch the Safety Net?," The World Bank Research Observer, World Bank, vol. 14(2), pages 187-207, August.
    6. Canagarajah, Sudharshan & Sethuraman, S.V., 2001. "Social protection and the informal sector in developing countries : challenges and opportunities," Social Protection Discussion Papers and Notes 24080, The World Bank.
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    Cited by:

    1. Elizabeth Lwanga Nanzir, 2017. "Financial Inclusion and Welfare in Post-Apartheid South Africa," Working Papers 323, African Economic Research Consortium, Research Department.
    2. Anna McCord, 2004. "Public works: Policy expectations and programme realities," SALDRU/CSSR Working Papers 079, Southern Africa Labour and Development Research Unit, University of Cape Town.

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