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Happy in the Informal Economy? A Case Study of Well-Being Among Day Labourers in South Africa

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  • PF Blaauw, I Botha, R Schenck and C Schoeman

Abstract

Past research provided evidence of the negative effect that individual unemployment can have on subjective well-being. The persistent high levels of unemployment and poverty in South Africa have been well documented. Many people are forced into the informal economy, where they engage in a variety of survivalist activities such as day labouring. As no previous study has been conducted on the well-being of day labourers, the aim of this paper is to investigate the determinants of the well-being of South African day labourers. Objective and subjective functions are compared to determine the role of income and other variables in the well-being of day labourers. The determinants are categorised according to economic, comparison and attitudinal variables. The objective function uses income and the subjective function uses the binary measure of ‘experiencing a good week in terms of wages’ as dependent variables. The results showed that comparison variables are important determinants for the subjective measure of well-being, and attitudinal variables are important for the objective measure of well-being. The economic variables were important in both functions. The findings of this paper confirm other research findings showing that personal income is important for well-being in a poor community. The difference between these functions indicates that the subjective and objective measures of well-being both capture valuable characteristics of SWB in a poor community.

Suggested Citation

  • PF Blaauw, I Botha, R Schenck and C Schoeman, 2013. "Happy in the Informal Economy? A Case Study of Well-Being Among Day Labourers in South Africa," Working Papers 337, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:337
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    File URL: http://www.econrsa.org/node/694
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    Keywords

    Day labouring; Well-being; Happiness; Informal economy;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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