Explaining participation in informal employment: a social contract perspective

Jan Windebank and Ioana Horodnic

International Journal of Entrepreneurship and Small Business, 2016, vol. 28, issue 2/3, 178-194

Abstract: This paper adopts a new way of conceptualising and explaining informal employment by representing participation in such work as a violation of the social contract between the state and its citizens, and as arising when the norms, values and beliefs of citizens (social morality) do not align with the codified laws and regulations of a society's formal institutions (state morality). Drawing upon evidence from 1,027 face-to-face interviews conducted in France during 2013, this paper reveals that the more citizens social morality deviates from state morality, the greater is their propensity to participate in informal employment, and that the social contract between the state and its citizens is weakest amongst men, single people as well as the divorced and separated, and those living in rural areas and the south-west and Mediterranean regions of France. The paper concludes by discussing the implications of these findings for theorising and tackling informal employment.

Keywords: informal sector; shadow economy; social contract; tax morale; institutional theory; France; participation; informal employment; social morality; state morality. (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijesbu:v:28:y:2016:i:2/3:p:178-194

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