Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/243351 
Year of Publication: 
2021
Series/Report no.: 
WIDER Working Paper No. 2021/25
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
This study explores the relationship between household poverty and depth of informality by proposing a new measure of informality at the household level. It is defined as the share of activities (hours worked or income earned) without social insurance for wage workers in the household. We apply cross-sectional regressions to five urban sub-Saharan African countries, showing that a household head informality dummy obscures a non-linear relationship between the depth of household informality and welfare outcomes. In some countries, a small share of income from formal jobs is associated with at least the same welfare as a fully formal portfolio. By assessing transitions between household portfolios with panel data for urban Nigeria, we also show that most welfare differences are explained by selection and that movements in and out of formality cannot sufficiently change welfare trajectories. The results call for better inclusion of informal profiles to social insurance programmes.
Subjects: 
informality
measurement
poverty
social protection
sub-Saharan Africa
JEL: 
H55
I31
J46
J88
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-963-1
Creative Commons License: 
cc-by-nc-sa Logo
Document Type: 
Working Paper

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