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Informality, Vulnerability And Development

Author

Listed:
  • DIBYENDU MAITI

    (Institute of Economic Growth, Delhi University Enclave, Delhi 110007, India)

  • ARUP MITRA

    (Institute of Economic Growth, Delhi University Enclave, Delhi 110007, India)

Abstract

This paper makes an attempt to estimate the index of informal sector employment that can be attributed to the supply-push phenomenon. Factors explaining the inter-state variations in this index include the industrial-informal sector wage gap, revenue expenditure and development expenditure incurred by the government. Increased development expenditure brings a decline in distress-led informalization because education, health and infrastructure facilities tend to enhance the employability of an individual. However, education as such does not reduce the residual absorption in the informal sector unless there is improvement in quality. The paper also notes an increase in inequality with an increase in distress-led informalization. Adoption of labor intensive technology in the organized or formal industrial sector is indeed crucial for pro-poor growth. The other policy implication is in terms of enhanced investment in the areas of human capital formation and overall development of the region.

Suggested Citation

  • Dibyendu Maiti & Arup Mitra, 2011. "Informality, Vulnerability And Development," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 16(02), pages 199-211.
    • Handle: RePEc:wsi:jdexxx:v:16:y:2011:i:02:n:s1084946711001793
    DOI: 10.1142/S1084946711001793
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    References listed on IDEAS

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    1. Dilip Mookherjee & Stefan Napel & Debraj Ray, 2010. "Aspirations, Segregation, and Occupational Choice," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 139-168, March.
    2. Colin C. Williams & Sara Nadin, 2010. "Entrepreneurship And The Informal Economy: An Overview," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 15(04), pages 361-378.
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