Informal employment among youth: Evidence from 20 school-to-work transition surveys

Abstract

February 2014 Informal employment among youth: Evidence from 20 school-to-work transition surveys This report provides empirical evidence to confirm that informal employment, a category considered as “non-standard” in traditional literature, is in fact “standard” among young workers in developing economies. Based on the school-to-work transitions surveys (SWTSs) run in 2012-2013, the report finds that three-quarters of young workers aged 15-29 (at the aggregate level) are currently engaged in informal employment. The consequences of informality are seen in lower wages, lower job satisfaction and higher shares of underemployment. The datasets analysed in the report offer a unique opportunity to look at the path of labour market activities and the influence this may have on the probability of informal employment. The evidence points to an influence of unemployment history – both number of unemployment spells and length of unemployment – on the probability of being informally employed. As such, informal employment seems to be, at least for some people, a way out of unemployment.