Formalization of the Informal Economy: Perspectives of Capital and Labour
The Indian Journal of Labour Economics, 2018, vol. 61, issue 1, 87-103
Abstract Informality takes various forms in countries and new forms over time. Hence, there can be no “one size fits all policy” to regulate or improve the conditions of informal workers. Governments tend to regulate to its advantage, for example to gain revenue through taxes. We call this the capital view of formalization. Workers need to benefit from moving from informal to formal arrangements. The labour view of formalization is that the fundamental right of workers and entrepreneurs must be recognized. In this paper, I discuss the journey of the concept of informality in the labour market in developing and developed countries. The debate on formalizing the informal economy can be seen from the lens of capital or the lens of labour. We argue that the capital view is only normalizing the enterprises, while the labour view is actually formalizing, with inclusion of workers in formal systems. The Indian debate on formalization to overcome the formal/informal divide has mainly taken the capital view.
Keywords: Informal sector; Informal economy; Labour market; Demonetization; GST (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s41027-018-0121-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:ijlaec:v:61:y:2018:i:1:d:10.1007_s41027-018-0121-8
Ordering information: This journal article can be ordered from
Access Statistics for this article
The Indian Journal of Labour Economics is currently edited by Alakh Sharma
More articles in The Indian Journal of Labour Economics from Springer, The Indian Society of Labour Economics (ISLE) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().