Martha Chen • Joann Vanek • Francie Lund • James Heintz with Renana Jhabvala • Christine Bonner

PROGRESS OFTHE WORLD’S WOMEN2005

WOMEN|WORK|&|POVERTY

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On the cover:Indigenous woman, home-based seamstress, Roraima Province, Brazil. Photo: Gerd Ludwig/Panos

UNIFEM is the women’s fund at the United Nations. It provides financial and technicalassistance to innovative programmes and strategies to foster women’s empowermentand gender equality. Placing the advancement of women’s human rights at the centreof all of its efforts, UNIFEM focuses on reducing feminized poverty; ending violenceagainst women; reversing the spread of HIV/AIDS among women and girls; and achiev-ing gender equality in democratic governance in times of peace as well as war.

The views expressed in this publication are those of the authors and do not necessarilyrepresent the views of UNIFEM, the United Nations or any of its affiliated organizations.

Progress of the World’s Women 2005: Women, Work and PovertyCopyright © 2005 United Nations Development Fund for WomenISBN: 1-932827-26-9

United Nations Development Fund for Women304 East 45th Street, 15th floorNew York, NY 10017USATel: 212-906-6400Fax: 212-906-6705E-mail: unifem@undp.orgWebsite: www.unifem.org

WOMEN|WORK|&|POVERTY

Martha Chen • Joann Vanek • Francie Lund • James Heintz with Renana Jhabvala • Christine Bonner

PROGRESS OFTHE WORLD’S WOMEN2005

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Data Analysis Teams Canada:Leah Vosko and Sylvia FullerYork UniversityToronto

Costa Rica: Jesper VenemaILO Regional Office Panama City

Egypt:Mona Amer and Alia El Mahdi University of CairoCairo

El Salvador:Edgar Lara López, Reinaldo Chanchán, Sara GammageFundación Nacional para el DesarrolloSan Salvador

Ghana:James Heintz Political Economy Research InstituteUniversity of Massachusetts Amherst, Mass.

India:Jeemol UnniNational Commission for Enterprises in theUnorganized SectorNew Delhi

South Africa: Daniela Casale, Colette Muller, Dorrit Posel University of KwaZulu NatalDurban

Editor: Karen Judd, UNIFEMConsulting Editor: Gloria JacobsCopyeditors: Tina Johnson, Anna GrossmanProduction: Barbara Adams, Nanette Braun, Jennifer Cooper, Heather Tilbury, UNIFEMDesign: VanGennep DesignCover design: Cynthia RhettPrinting: ProGraphics

Advisory TeamDebbie Budlender Community Agency for Social Enquiry Cape Town, South Africa

Diane ElsonUniversity of EssexColchester, Essex United Kingdom

Guadalupe EspinosaInstitute of Social DevelopmentMexico City, Mexico

Noeleen HeyzerExecutive DirectorUNIFEMNew York, NY, USA

Selim JahanBureau of Development Policy - UNDPNew York, NY, USA

Francesca Perucci UN Statistics DivisionNew York, NY, USA

Anne Trebilcock ILOGeneva, Switzerland

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Contents

5 Acknowledgements

6 Preface

8 Overview: Women, Work and Poverty

14 Chapter 1: Employment and Poverty ReductionPoverty and Gender Inequality in the 21st CenturyEmployment in the 21st CenturyEmployment in the MDGs and PRSPsOrganization of this Report

22 Chapter 2: The Totality of Women’s WorkUnderstanding and Measuring Women’s WorkMapping Women’s Paid and Unpaid WorkThe Dynamics of Women’s Paid and Unpaid WorkGender and Other Sources of Disadvantage: Implications for Poverty Reduction

36 Chapter 3: Employment, Gender and PovertyInformal Employment: Definition and Recent DataMillennium Development Goal 3: Recommended Employment IndicatorsLabour Force Segmentation, Earnings and Poverty: Developed Country DataLabour Force Segmentation, Earnings and Poverty: New Data from Developing CountriesLabour Markets and Labour Force StatisticsTable Notes

58 Chapter 4: The Reality of Women’s Informal WorkNature of Informal WorkBenefits of Informal WorkCosts of Informal WorkClose-up: Occupational GroupsA Causal Model of the Informal EconomyPoverty, Gender and Informal Employment

74 Chapter 5: Women’s Organizing in the Informal EconomyBenefits of OrganizingIdentifying as WorkersStrategies and Forms of OrganizingInfluencing Policy Decisions: National, Regional and International Networks and AlliancesThe Next Stage

86 Chapter 6: A Framework for Policy and ActionPolicy Debates on the Informal EconomyFramework for Policy and ActionClose-up: Good Practice CasesThe Way Forward

105 References Cited

111 About the Authors

112 Index

Contents

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Tables and Figures

28 Table 2.1:Risks and vulnerabilities associated with employment at different stages of the life cycle

40 Table 3.1:Wage and self-employment in non-agricultural informal employment by sex,1994/2000

45 Table 3.2:Percentage distribution of women’s and men’s informal employment by employment status

46 Table 3.3:Percentage distribution of women’s and men’s formal employment by type

47 Table 3.4:Hourly earnings as a percentage of the hourly earnings of formal, private, non-agricultural wage workers by employment status category

48 Table 3.5:Average wages per worker and women’s share of employment for small and microenterprises by size, Egypt, 2003 (expressed in 2002 Egyptian pounds)

48 Table 3.6:Women’s hourly earnings as a percentage of men’s hourly earnings

49 Table 3.7:Hourly earnings in selected employment status categories, Ghana (in cedis and purchasing power parity adjusted U.S. dollars)

50 Table 3.8:Average weekly hours of work by sex and employment status

50 Table 3.9:Total hours worked per week in employment and unpaid care work, employed population (15+), Ghana, 1998/1999

51 Table 3.10:Working poor as a percentage of employment (15+) in selected employment statuses by sex, 2003, El Salvador

52 Table 3.11:Relative poverty rates: working poor poverty rates by sex and employment status category and formal and informal employment, as a percentage of the poverty rate for formal, private non-agricultural wage workers

53 Table 3.12:Poverty rates by household type, South Africa, 2003

53 Table 3.13:Poverty rates among persons in households sustaining themselves on informal income, urban India, 1999/2000

54 Figure 3.1:Segmentation of Informal Employment by Average Earnings and Sex

54 Figure 3.2:Poverty Risk of Households by Sources of Income

54 Figure 3.3:Poverty Risk of Households by Primary Source of Income

The authors are deeply grateful to UNIFEM forcommissioning this report on informal employ-ment and the working poor, especially women,and their importance in efforts to eliminatepoverty. In particular, we want to express ourgratitude to Noeleen Heyzer, Executive Director,for her leadership, her interest and expertise onissues of women, work and poverty, and for hersubstantive and financial support, without whichthe report would not have been possible.

We would also like to acknowledge JoanneSandler, UNIFEM Deputy Director for Programmefor her inputs and support and Meagan Bovell,Nisreen Alami, Leyla Sharafe and Ellen Houstonin UNIFEM’s Economic Security and Rights sec-tion for research support. Special thanks are dueto Karen Judd, UNIFEM editor, and GloriaJacobs, consulting editor, who provided valuableinputs and shepherded the report to completion.

Other UNIFEM staff with whom we consult-ed include Meenakshi Ahluwalia, Aileen Allen,Letty Chiwara, Nazneen Damji, Sandra Edwards,Eva Fodor, Chandi Joshi, Yelena Kudryavtseva,Osnat Lubrani, Lucita Lazo, Firoza Mehrotra, ZinaMounla, Natasha Morales, Sunita Narain, GraceOkonji, Teresa Rodriguez, Amelia KinahoiSiamoumua, Damira Sartbaeva, Alice Shackelford,Stephanie Urdang, Marijke Velzeboer-Salcedo.Thanks also to UNIFEM interns Michael Montieland Inés Tófalo for translation of material inSpanish and to Marie-Michele Arthur and TracyCarvalho for their management of contracts andpayments.

We would also like to express our thanks tothe UNDP and the ILO for both substantiveadvice and additional financial support. In addi-tion, Selim Jahan of UNDP and Anne Trebilcockof the ILO served on the Advisory Team and pro-vided valuable comments. Debbie Budlender, of

CASE in South Africa; Diane Elson, coordinator ofUNIFEM’s first Progress of the World’s Women in2000; and Guadalupe Espinoza, former UNIFEMRegional Programme Director in Mexico providedmany helpful comments. Ralf Hussmanns of theILO provided statistical guidance and FrancescaPerucci of the UN Statistics Division providedadditional statistical inputs. Other ILO staff withwhom we consulted include Amy King-DeJardin,Marie-Thérèse DuPré, Rakawin Lee, KatarinaTsotroudi, María Elena Valenzuela, Linda Wirthand Sylvester Young.

Very special thanks are due to the membersof the Data Analysis Teams who carried out thedata analysis in seven countries for Chapter 3.Special thanks also to WIEGO team membersMarais Canali, who compiled references, wrotesome of the good practice cases and assistedthe authors throughout; Shalini Sinha, whoworked closely with the authors on Chapter 5;Anna Marriott, Cally Ardington and KudzaiMakomva, who assisted with research for differ-ent chapters; and Suzanne Van Hook, who man-aged the contracts for the data analysis team.Others in the WIEGO network who were consult-ed on the cases studies featured in Chapters 5and 6 include Kofi Asamoah, StephanieBarrientos, Ela Bhatt, Mirai Chatterjee, NicoleConstable, Dan Gallin, Pat Horn, Elaine Jones,Paula Kantor, Martin Medina, Winnie Mitullah,Pun Ngai, Fred Pieterson, Jennefer Sebstad,and Lynda Yanz.

Finally, we would like to thank the workingpoor women and men around the world whoinspire our work.

Martha Chen, Joann Vanek, Francie Lund, James Heintz, Renana Jhabvala,

and Christine Bonner

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Acknowledgements

The modern global economy is now a reality. Yeteverywhere in the world, there are people work-ing in conditions that should no longer exist inthis 21st century, for income that is barelyenough for survival. Home-based workers put in long hours each day, yet are paid for only afraction of their time. Rural women spend back-breaking hours on family plots, often for no pay-ment at all. Those in urban areas work in unreg-ulated factories, earning pennies for productsthat are shipped via sub-contractors to marketsfar away, or they find jobs as waste-pickers,scavenging garbage heaps for items to sell. Theworking poor are both men and women.However, the further down the chain of qualityand security, the more women you find. Yet it istheir work — including their unpaid work in thehousehold as well as their poorly paid work ininsecure jobs or small enterprises — that holdsfamilies and communities together.

Informal workers are everywhere, in everycountry and region. Globalization has broughtnew opportunities for many workers, especiallythose who are well educated, with the skillsdemanded in the high-tech global economy. Butit has deepened insecurity and poverty for manyothers, including women, who have neither theskills needed to compete nor the means toacquire them. The lives of these working poorpeople are the message of this report: too manyof them, both women and men, are in unregulat-ed and insecure jobs, in conditions that are fre-quently unhealthy and often unsafe.

Increasingly, rather than informal workbecoming formalized as economies grow, workis moving from formal to informal, from regulatedto unregulated, and workers lose job security aswell as medical and other benefits. What we areseeing is that growth does not automatically‘trickle down’ to the poor. It can in fact widen thegap between rich and poor. As globalizationintensifies, the likelihood of obtaining formalemployment is decreasing in many places, with“footloose” companies shifting production fromone unregulated zone to an even less regulatedone elsewhere, employing workers in informalcontract or casual work with low earnings and lit-tle or no benefits.

In many developing countries, with the col-lapse of commodity prices and the persistenceof agricultural subsidies in rich countries, manyrural communities are disintegrating, forcing bothwomen and men into the informal economy. Thatis partly the reason why, in developing countries,

informal employment comprises from 50 to 80per cent of total non-agricultural employment.When agricultural workers such as coffee har-vesters or cocoa growers who are unable tocompete in the world market are included, thepercentage of informal workers is dramaticallyhigher. In nearly all developing countries (exceptfor North Africa) the proportion of workingwomen in informal employment is greater thanthe proportion of working men: over 60 per centof working women are in informal employmentoutside of agriculture.

Women workers are not only concentrated inthe informal economy, they are in the more pre-carious forms of informal employment, whereearnings are the most unreliable and the mostmeagre. While in some instances, their incomecan be important in helping families move out ofpoverty, this is only true if there is more than oneearner. This is a sobering fact to consider as weredouble our efforts to implement the MillenniumDevelopment Goals, including the elimination ofpoverty and the achievement of gender equality.Not achieving these goals is unthinkable.Widening gaps between rich and poor, andwomen and men can only contribute to greaterinstability and insecurity in the world.

And this is the other message of this report:decent work is a basic human right, one thatgovernments, corporations and international pol-icymakers can make a reality for all working peo-ple. Change is possible, and innovative solutionsare already being acted upon. This report showshow and where change has happened, anddescribes how governments, UN and NGO part-ners and socially responsible corporations canwork together to ensure that informal workers,especially women, receive an equitable return fortheir labour.

To make this happen, four things need to bemade a priority:

First, organizing women informal workers toobtain legal and social protection. Unless womenare empowered to demand services, protectionand their rights, the basic structures that governtheir lives will not change. Women acting alonecan only bring about limited change. This therefore means supporting women’s organizing,along with unions and member-based workers’organizations, to ensure that more workers receivethe labour rights to which they are entitled.

Second, for the self-employed, greater effortmust be made to deliver services to these work-ers, to improve access to credit and financial

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Preface

markets and to mobilize demands for their prod-ucts and services. Women’s skills and assetsmust be upgraded so they can compete moreeffectively in these markets. In Burkina Faso, wesaw firsthand the difference that skills can make.UNIFEM helped women who produced shea but-ter learn how to improve the quality of their prod-uct. This in turn helped them move up the valuechain, establishing a specialized, niche marketfor their product that is now bought by corpora-tions at better prices than the women werereceiving previously.

Third, there must be appropriate policies insupport of informal workers. This requires thatinformal workers are visible and that the totalityof their work — especially in the case of women— is valued. The starting point for meaningfulpolicy decisions is to make women’s informalwork visible through gender-sensitive, disaggre-gated statistics on national labour forces. Thisdata must be developed, analysed and used increating policy that focuses on economic securi-ty and rights.

Finally, there is a need to strengthen strate-gies that can transform basic structures that per-petuate gender inequality. What kind of globalrules are required to regulate markets, and guidethe priorities of international economic institu-tions towards globalization that improves livesand working conditions? Closing the genderincome gaps, ensuring safe and healthy workingconditions for all, must be central to policy andrule-setting. Socially responsible corporationscan lead the way in this. At the same time, allcorporations can be held accountable throughstandard-setting and the independent monitoringand verification that are a necessary part ofimplementation.

This report is a call to action to achieve thegoals outlined here. Advocates and the working

poor themselves have done much to improveconditions already and to ensure that the work-ing poor in the informal economy remain on theinternational agenda. Socially responsible cam-paigns and ethical marketing initiatives havehelped to raise awareness around the impor-tance of better working conditions for informalworkers. The Clean Clothes Campaign and theWomen’s Principles, a set of goals for corpora-tions that use sub-contractors or run factories indeveloping countries, created by the CalvertInvestment Group, working with UNIFEM, arepart of an effort by consumers in developedcountries to insist that the goods they buy becreated under humane conditions. Governmentsare also recognizing the importance of protect-ing the lives and well-being of their citizens —their human capital — and have insisted thatcertain standards be maintained and minimumwages paid.

These efforts should not be the work only ofsocially responsible companies, or concernedconsumers, or of organizations of informal work-ers. Corporations and entities active in the glob-al marketplace must alter their policies to “makepoverty history.” Advocates can use the toolsprovided in this report to reach beyond their coreconstituencies. They can assess the impact ofeconomic policies on women and men and insiston those that offer concrete solutions to thedeplorable conditions prevalent in the informaleconomy.

Noeleen HeyzerExecutive Director, UNIFEM

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Preface

2005 marks the fifth anniversary of the UNMillennium Declaration, adopted in 2000 and thetenth anniversary of the Beijing Platform forAction in 1995. In the decade since Beijing, thenumber of people living on less than $1 a day hasfallen; the gender gap in primary and (to a lesserextent) secondary education has been reduced;and women enjoy greater participation in electedassemblies and state institutions. In addition,women are a growing presence in the labourmarket– the global indicator used to approximatewomen’s economic status (UN 2005).

However, the decline in overall povertymasks significant differences not only betweenbut also within regions. Asia experienced thegreatest decline in extreme poverty, followed byLatin America, but sub-Saharan Africa experi-enced an increase. Even where the numbers ofextremely poor people have declined, notablyChina and India, poverty persists in differentareas and social groups, reflected in risinginequalities (UN 2005).

For women, progress, while steady, hasbeen painfully slow. Despite increased parity inprimary education, disparities are still wide insecondary and tertiary education—both increas-ingly key to new employment opportunities. Andwhile women’s share of seats in parliament haveinched up in all regions, women still hold only 16per cent of parliamentary seats worldwide.Finally, although women have entered the paidlabour force in great numbers, the result in termsof economic security is not clear. According tothe United Nations’ Millennium DevelopmentGoals Report 2005: “Women’s access to paidemployment is lower than men’s in most of thedeveloping world…. Women are less likely thanmen to hold paid and regular jobs and more oftenwork in the informal economy, which provides lit-tle financial security” (UN 2005).

Today’s global world is one of wideningincome inequality and for many, increasing eco-nomic insecurity. Informal employment, far fromdisappearing, is persistent and widespread. Inmany places, economic growth has dependedon capital-intensive production in a few sectorsrather than on increasing employment opportuni-ties, pushing more and more people into theinformal economy. In others, many of the jobsgenerated by economic growth are not coveredby legal or social protection, as labour marketsare de-regulated, labour standards are relaxed

and employers cut costs (see Chapter 4). As aresult, a growing share of the workforce in bothdeveloped and developing countries is not cov-ered by employment-based social and legal pro-tection.

Moreover, in the process of economicgrowth and trade liberalization, some informalworkers get left behind altogether. This includeswage workers who lose their jobs when compa-nies mechanize, retrench or shift locations. It alsoincludes the smallest-scale producers andtraders who have little if any access to govern-ment subsidies, tax rebates or promotionalmeasures to help them compete in export mar-kets or against imported goods. These ‘losers’ inthe global economy have to find ways to survivein the local economy, many resorting to suchoccupations as waste picking or low-end streettrading.

Progress of the World’s Women 2005 makesthe case that strengthening women’s economicsecurity is critical to efforts to reduce poverty andpromote gender equality, and that decent work isbasic to economic security. It provides data toshow that:

� the proportion of women workers engaged ininformal employment is generally greater thanthe proportion of men workers;

� women are concentrated in the more precari-ous types of informal employment; and

� the average earnings from these types of infor-mal employment are too low, in the absence ofother sources of income, to raise householdsout of poverty.

The report concludes that unless efforts aremade to create decent work for the global infor-mal workforce, the world will not be able to elim-inate poverty or achieve gender equality.

Statistical FindingsStatistics from a variety of developing countriesshow that, despite differences in size, geograph-ic location and income level, fully 50 to 80 percent of non-agricultural employment is informal.Between 60 and 70 per cent of informal workersin developing countries are self-employed,including employers, own-account workers andunpaid contributing family workers in familyenterprises (ILO 2002b). The remaining 30 to 40per cent are informal wage workers, including theemployees of informal enterprises, casual day

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Overview: Women, Workand Poverty

labourers, domestic workers and industrial out-workers.

In terms of earnings, average earnings arehigher in formal employment than in informalemployment and in non-agriculture than in agri-culture activities. Average earnings also varyacross segments of the informal labour force.Informal wage employment is generally superiorto informal self-employment. However, a hierar-chy exists: informal employers have the highestaverage earnings followed by their employees,then own-account workers, and then casualwage workers and domestic workers. Relatedstatistical analyses have found that industrialoutworkers have the lowest average earnings ofall (Charmes and Lekehal n.d.; Chen andSnodgrass 2001).

The risk of poverty is lower in formal employ-ment relative to informal employment and in non-agricultural employment relative to agriculturalemployment. The risk of poverty also variesacross segments of the informal labour force.Generally, informal wage workers – with theexception of domestic workers, casual wageworkers, and industrial outworkers – have lowerpoverty risk than own account workers.

Gender inequality in employment has multi-ple dimensions. First, women are concentrated inmore precarious forms of employment in whichearnings are low. In developed countries, womencomprise the majority of part-time and temporaryworkers.

In developing countries, except in those withlarge low-wage export sectors, women typicallyaccount for a relatively small share of informalwage employment. However, informal employ-ment generally represents a larger source ofemployment for women than formal employmentand a greater share of women’s employmentthan men’s employment. In developing countriesover 60 per cent of women workers are in infor-mal employment outside of agriculture—far moreif agriculture is included. The exception is NorthAfrica, where 43 per cent of women workers, anda slightly higher per cent of men workers, areinformally employed.

Within the informal economy, women areconcentrated in work associated with low andunstable earnings and with high risks of poverty.Outside of agriculture, women are more likelythan men to be own account workers, domesticworkers, unpaid contributing workers in family

enterprises and industrial outworkers. A signifi-cant proportion of women working in agricultureare also unpaid contributing workers on the fam-ily farm.

Second, within employment categories,women’s hourly and monthly earnings are gener-ally lower than men’s. A gender gap in earningsexists across almost all employment categories –including informal wage employment and self-employment. A few exceptions exist among pub-lic sector employees in certain countries, such asEl Salvador, and in cases like Egypt where mostof women’s employment involves unpaid workon family enterprises and the few women who doparticipate in paid employment tend to be highlyeducated. In these exceptional cases, women’saverage hourly earnings can be higher thanmen’s.

Third, in the countries for which data areavailable, women work fewer hours on average inpaid work than do men. In part, this is due towomen’s long hours in unpaid household labour.Responsibilities for unpaid household work alsoreinforce labour force segmentation – womencan be restricted to own-account or home-basedemployment, even if they have to work longerhours and earn less than they would in othertypes of employment.

Finally, despite the low earnings and precar-ious nature of much of women’s paid work, inboth developed and developing countries,women’s labour force participation can help keepa family out of poverty – provided there are addi-tional sources of family income.

Research Findings The links between work and poverty reflect notonly how much women and men earn but howthey earn it and for how long. Each place of workis associated with specific costs, risks and ben-efits, depending variously on security of sitetenure, costs of securing it, access to neededinfrastructure, such as light, water, toilets, stor-age, garbage removal, etc.; access to customersand suppliers; ability of informal workers toorganize; and the different risks and hazardsassociated with the site.

Several broad categories of informal work-ers can be distinguished according to theiremployment relations: employers, their employ-ees, own account workers who do not hire oth-ers, unpaid contributing family workers, casual

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Overview

wage workers and industrial outworkers.Industrial outworkers, the vast majority of whomare women, lack firm contracts, have the lowestaverage earnings and often are not paid formonths on end. The small amount and insecurityof their income is exacerbated by the fact thatthey have to pay for non-wage costs of produc-tion, such as workplace, equipment and utilities(ILO 2002b; Carr et al. 2000).

The modern industrial system has notexpanded as fully in developing countries as itonce did in developed countries. In many develop-ing countries industrial production takes place inmicro and small units, in family businesses or insingle person units, while traditional personalizedsystems of production and exchange still obtain inagricultural and artisan production. But in today’sglobalizing economy, both traditional and semi-industrial relations of production and exchange arebeing inserted into or displaced by the global sys-tem of production. Authority and power tend to getconcentrated in the top links of value chains or dif-fused across firms in complex networks, making itdifficult for micro-entrepreneurs to gain access,compete and bargain and for wage workers to bar-gain for fair wages and working conditions. Highlycompetitive conditions among small-scale suppli-ers and the significant market power of transna-tional corporations mean that the lion’s share of thevalue produced across these value chains is cap-tured by the most powerful players.

For the rest—those who can’t compete—some may become suppliers in these chains ornetworks, others struggle as subcontractorswhile still others are forced to hire out their labourto subcontractors. In today’s global economy, itis hard to imagine a greater physical and psy-chological distance, or a greater imbalance – interms of power, profit and life-style – than thatbetween the woman who stitches garments orsoccer balls from her home in Pakistan for abrand-name retailer in Europe or North Americaand the chief executive officer (CEO) of thatbrand-name corporation.

The consequences of working informally gofar beyond the income dimensions of poverty toinclude lack of human rights and social inclusion.Compared to those who work in the formal econ-omy, those who work in the informal economyare likely:

� to have less access to basic infrastructure andsocial services;

� to face greater exposure to common contin-gencies (e.g., illness, property loss, disabilityand death);

� to have less access to the means to addressthese contingencies (e.g., health, property, dis-ability or life insurance);

� to have, as a result, lower levels of health, edu-cation and longevity;

� to have less access to financial, physical andother productive assets;

� to have fewer rights and benefits of employment;� to have less secure property rights over land,

housing or other productive assets; and� to face greater exclusion from state, market

and political institutions that determine the‘rules of the game’ in these various spheres.

Together these costs take an enormous toll on thefinancial, physical and psychological well-beingof many informal workers and their families.

New Analytical Tools and PromisingExamplesThis report offers several new conceptual andmethodological frameworks that provide freshinsights into the links among informal employ-ment, poverty and gender inequality and serve asa basis for future research. These include:

� an analysis of the linkages between the genderdivision of labour, women’s unpaid work andinformal paid work along different dimensions(Chapter 2);

� a framework based on the proposed newemployment indicators for Millennium Develop-ment Goal 3; analysing differences by sex intypes of employment and earnings (Chapter 3);

� a statistical method for assessing the ‘povertyrisk’ of different employment statuses by sex,linking national labour force and householdincome data to show the links between gender,employment and poverty risk (Chapter 3);

� an expanded definition and a multi-segmentedmodel of labour markets that takes intoaccount labour market structures in develop-ing countries and changing employment rela-tions in developed countries (Chapter 3);

� a typology of the costs – both direct and indi-rect – of informal employment that can be usedto carry out a full accounting of the social anddistributional outcomes of different types ofinformal work (Chapter 4);

� a causal model of the informal economy, whichposits that some people operate informally bychoice, others do so out of necessity, and stillothers do so because of tradition (e.g., heredi-tary occupations) (Chapter 4);

� a new policy analysis tool, modelled on genderbudget analysis, called informal economybudget analysis (Chapter 6).

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To ensure that appropriate policies, institu-tions and services are put in place, the informalworkforce needs to be visible to policy makersand government planners. To date, relatively fewcountries have comprehensive statistical data onthe informal economy, and the collection of suchdata needs to be given greater priority. Morecountries need to collect statistics on informalemployment in their labour force surveys, andcountries that already do this need to improvethe quality of statistics they collect. Moreover,data that is collected needs to be analysed tobring out the linkages between informal employ-ment, poverty and gender equality, as done forthe first time for seven countries in this report.

There are many promising examples of whatcan and should be done to help the working poor,especially women, minimize the costs and maxi-mize the benefits of their work. This report fea-tures a selection of these. They come from allregions and are initiated by governments as wellas civil society and the private sector, women’sorganizations as well as labour organizations, anddemonstrate the power of working in partnership.

Future DirectionsThe overarching future policy goal is to stop theongoing generation of informal, insecure andbadly paid employment alongside the constric-tion of formal employment opportunities. Thisrequires expanding formal employment opportu-nities, formalizing informal enterprises and jobs,and increasing the returns to their labour of thosewho work in the informal economy. For labourand women’s rights advocates it meansdemanding a favourable policy environment andspecific interventions in order to increase eco-nomic opportunities, social protection, and rep-resentative voice for the working poor, especiallywomen, in the informal economy.

A favourable policy environmentBoth poverty reduction and gender equalityrequire an economic policy environment thatsupports, rather than ignores, the working poor.Most (if not all) economic and social policies –both macro and micro – affect the lives and workof the working poor in various direct ways:

� as workers� as consumers� as users of infrastructure, finance and proper-

ty, including urban space and naturalresources

� as potential recipients of tax-funded servicesor transfers (World Bank 2005a).

Economic policies that discount the real-lifestructure and behaviour of labour markets can-not be assumed to be neutral towards labour.Similarly, economic policies that ignore the factthat most unpaid care work is done by womencannot be assumed to be neutral towardswomen’s labour in particular. Economic plannersmust take into account the size, composition andcontribution of both the formal and informallabour forces in different countries and recognizethat policies have differential impacts on formaland informal enterprises and workers, and onwomen and men within these categories. Toassess how economic policies affect the workingpoor, it is important to analyse how class, genderand other biases intersect in labour markets.More specifically, it is important to identify inher-ent biases in favour of capital (over labour), for-mal enterprises (over informal enterprises), for-mal labour (over informal labour) and men (overwomen) within each of these categories.

A new tool, informal economy budget analysis,modelled on gender-responsive budget analysis, isdesigned to assess whether and how the alloca-tion of resources by government at different levels(local, provincial/ state and national/ federal) andacross different ministries or departments (trade,labour, housing, health) serves to (a) lower or raisethe costs of those working informally, and (b) pro-vide or deny access to benefits that could helpthem grow their enterprises and otherwise takesteps along the path to steady and secureincomes. Used in conjunction with gender-respon-sive budget analysis, informal economy budgetanalysis can also shed light on the intersection ofgender and other sources of disadvantage (byclass, ethnicity or geography) in the realm of work.

Targeted interventions In addition to a favourable policy environment,targeted interventions are required to address thecosts of working informally. These should aim:

� To increase the assets, access and competitive-ness of the working poor, both self-employedand wage employed, in the informal economy

For the working poor to be able to takeadvantage of the opportunities offered by a morefavourable policy environment, they need greatermarket access as well as the relevant resourcesand skills with which to better compete in mar-kets. Over the past three decades, there hasbeen a proliferation of projects designed to pro-vide microfinance and/or business developmentservices to microenterprises. While the vastmajority of the clients of microfinance are work-

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Overview

ing poor women, business development servicesare not typically targeted at the smallest enter-prises, particularly those run by women. Futuremicrofinance and business development servic-es need to target working poor women moreexplicitly, and with context-specific and user-friendly services.

� To improve the terms of trade for the workingpoor, especially women, in the informal economy

To compete effectively in the markets, inaddition to having the requisite resources andskills, the working poor need to be able to nego-tiate favourable terms of trade. This involveschanging government policies, government-setprices or institutional arrangements as well asthe balance of power within markets or valuechains. This requires that the working poor, espe-cially women, have bargaining power and areable to participate in the negotiations that deter-mine the terms of trade in the sectors withinwhich they work. Often what is effective in thisregard is joint action by organizations of theworking poor and like-minded allies who canleverage access to government policy makersand to rule-setting institutions.

� To secure appropriate legal frameworks for theworking poor, both self-employed and wageemployed, in the informal economy

Workers in the informal economy, especiallythe poor, need legal recognition as workers andthe legal entitlements that come with that recog-nition, including the right to work (e.g., to vend inpublic spaces), rights at work and rights to prop-erty. Strategies to secure the rights of womeninformal wage workers include internationallabour standards and conventions; nationallabour legislation; corporate codes of conduct;and collective bargaining agreements and griev-ance mechanisms.

� To address risk and uncertainty faced by poorworkers, especially women, in informalemployment

All workers, and informal workers in particu-lar, need protection against the risks and uncer-tainties associated with their work as well as thecommon contingencies of illness, property loss,maternity and child care, disability and death.Providing needed protections requires a varietyof interventions, including different safety nets(relief payments, cash transfers, public works);insurance coverage of various kinds (health,property, disability, life); and pensions or long-term savings schemes. Governments, the privatesector, trade unions, non-governmental organi-

zations and other membership-based organiza-tions can all play active roles in providing socialprotection to informal workers.

Support for organizing by women informal workers To hold other players accountable to thesestrategic priorities, the working poor need to beable to organize and have representative voice inpolicy-making processes and institutions.Informal workers, especially women, cannotcount on other actors to represent their interestsin policy-making or programme planningprocesses, including national MillenniumDevelopment Goals reports and the PovertyReduction Strategy Papers (PRSPs). Securingthis seat at the decision-making table requiressupporting and strengthening organizations ofinformal workers, with a special focus onwomen’s organizations and women’s leadership.These organizations also require creative link-ages with and on-going support from women’sorganizations and other social justice organiza-tions, including trade unions; governments; andUN partners, such as UNIFEM, UNDP and theILO.

While most of these priorities have been onthe international development agenda for sometime, this report highlights two strategic con-cerns that do not get sufficient attention.

First, poverty and inequality cannot bereduced by expecting economic policies to gen-erate employment and social policies to com-pensate those for whom there are no jobs, oronly bad jobs. Economic growth often fails togenerate sufficient employment or employmentthat pays enough to live free of poverty, whilecompensation through social policies is typicallyinadequate or neglected altogether.

Second, poverty reduction requires a majorreorientation in economic priorities to focus onemployment, not just growth and inflation. To beeffective, strategies to reduce poverty and pro-mote equality should be employment-orientedand worker-centred.

In recent years, many observers have calledfor people-centred or gender-responsiveapproaches to poverty reduction. What is calledfor here is an approach that focuses on theneeds and constraints of the working poor, espe-cially women, as workers, not only as citizens, asmembers of a vulnerable group or as members ofpoor households. A worker focus will providecoherence and relevance to poverty reductionstrategies because most poor people work,because earnings represent the main source ofincome in poor households, and because work-

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ing conditions affect all dimensions of poverty(i.e., income, human development, human rightsand social inclusion).

The Way ForwardCombating poverty and achieving gender equal-ity require a major reorientation of economic anddevelopment planning. Governments and theirinternational development partners need to rec-ognize that that there are no short-cuts in thiseffort: economic growth, even if supplementedby social policies, too often fails to stimulate thekind of secure, protected employment needed toenable the working poor to earn an income suffi-cient to pull themselves out of poverty. Women’sentry into the paid labour force on the terms andunder the conditions identified in this report hasnot resulted in the economic security needed toimprove gender equality

The creation of new and better employmentopportunities – especially for the working poor –must be an urgent priority for all economic poli-cies. The experience of the last two decades,especially in developing countries, has shownthat policies targeted narrowly towards contain-ing inflation and ensuring price stability, such asthose frequently promoted by the IMF and theWorld Bank, often create an economic environ-ment that is hostile to an expansion of more andbetter employment opportunities. Successfulefforts to combat poverty require a radical changein the economic policies promoted by these insti-tutions and adopted by many governments.

In the short term, however, there are thingsthat can be done short of the complete overhaulof development thinking and planning called for.What is needed is a critical mass of institutionsand individuals at all levels to work together on aset of core priorities. These include:

Core Priority # 1 - To promote decent employ-ment for both women and men as a key pathway toreducing poverty and gender inequality. A concertedeffort is needed to ensure that decent employmentopportunities are viewed as a target rather than anoutcome of economic policies, including nationalMDG strategies and Poverty Reduction Strategies.

Core Priority # 2 - To increase visibility ofinformal women workers in national labour forcestatistics and in national gender and povertyassessments, using the employment by type andearnings indicators recommended for MillenniumDevelopment Goal 3.

Core Priority # 3 - To promote a morefavourable policy environment for the working poor,especially women, in the informal economy throughimproved analysis, broad awareness building andparticipatory policy dialogues.

Core Priority # 4 - To support and strength-en organizations representing women informalworkers and help them gain effective voice in rel-evant policy-making processes and institutions.

This report shows that workers in the infor-mal economy, especially women, have loweraverage earnings and a higher poverty risk thanworkers in the formal economy. The meagre ben-efits and high costs of informal employmentmean that most informal workers are not able towork their way out of poverty. In the short term,they are often forced to ‘over-work’ to coverthese costs and still somehow make ends meet.In the long term, the cumulative toll of beingover-worked, under-compensated and under-protected on informal workers, their families, andtheir societies undermines human capital anddepletes physical capital.

In conclusion, the working poor in the infor-mal economy are relegated to low paid, insecureforms of employment that make it impossible toearn sufficient income to move out of poverty.So long as the majority of women workers areinformally employed, gender equality will alsoremain an elusive goal. Progress on both ofthese goals therefore demands that all thosecommitted to achieving the MDGs, including theUN system, governments and the internationaltrade and finance institutions, make decentemployment a priority – and that corporations be made more socially responsible. Informalworkers, both women and men, organized inunions, cooperatives or grassroots organiza-tions, are ready to partner with them in this vitalendeavour.

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1CHAPTEREmployment and PovertyReduction

Woman selling ackee in a street market,Kingston, Jamaica.

Photo: Christopher P.Baker/Lonely Planet

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At the Millennium Summit in September2000, the largest-ever assembly of nation-al leaders reaffirmed that poverty andgender inequality are among the mostpersistent and pervasive global problems.

After a decade or more of relative neglect, povertyhad pushed its way back to the top of the globalagenda. After three decades of women’s advocacy,gender equality had moved from the margins to thecentre of that agenda (UNIFEM 2002b). Moreover,the Millennium Declaration, adopted by the world’sleaders, recognized that the two are linked, notingthe centrality of gender equality to efforts to combatpoverty and hunger and to stimulate truly sustain-able development (UN 2000). In so doing, theDeclaration honoured the vision of the Platform forAction adopted at the 1995 Fourth WorldConference on Women in Beijing.

Progress of the World’s Women 2005 marksthe fifth anniversary of the UN MillenniumDeclaration and the tenth anniversary of the BeijingPlatform for Action. It focuses on a key pillar of boththe Millennium Declaration and the Beijing Platform:strengthening women’s economic security andrights. Within that framework, it looks particularly atemployment, especially informal employment, andthe potential it has to either perpetuate or reduceboth poverty and gender inequality. It provides thelatest data on the size and composition of the infor-mal economy in different regions and compares offi-cial national data on average earnings and povertyrisk across different segments of both the informaland formal workforces in several countries. It looksat the costs and benefits of informal work and pro-vides a strategic framework for promoting decentwork for women informal workers.

Poverty and Gender Inequality in the21st Century The persistence of poverty worldwide is a majorchallenge of the 21st century. Five years after theMillennium Summit, more than 1 billion peoplestruggle to survive on less than $1 a day (UN 2005).Of these, roughly half – 550 million – are working(ILO 2003a). By definition, 550 million people cannot

work their way out of extreme poverty. They simplydo not earn enough to feed themselves and theirfamilies, much less to deal with the economic risksand uncertainty they face.

The 2005 Millennium Development GoalsReport shows that progress is possible. The numberof people living on less than $1 a day fell by nearly250 million from 1990 to 2001. But the decline inoverall poverty masks significant differencesbetween regions: Asia showed the greatest declinein extreme poverty, followed by a much slowerdecline in Latin America; while Sub-Saharan Africaexperienced an increase in extreme poverty. Chinaand India account for much of the poverty decline inAsia (UN 2005). But in India, deep pockets of pover-ty persist and regional disparities have increased(Deaton and Dreze 2002). And in China, income dis-parities between rural and urban areas and betweendifferent regions remain large, as reflected in thelarge numbers of rural to urban migrants from thelate 1980s to the end of the 1990s.1

For poor people who are working, how theymake a living – their sources of income or livelihood– is a major preoccupation. Poverty, however, is mul-tidimensional. Today, there are several broadapproaches to understanding and measuring pover-ty and well-being, including:

� income and basic needs: focusing on theincome, expenditures, and basic needs of poorhouseholds;

� human development: focusing on health, educa-tion, longevity and other human capabilities andon the choices or freedom of poor people;

� human rights: focusing on the civic, political,economic and social rights of the poor; and

� social inclusion: focusing on the access of poorpeople to what they are entitled to as citizens andon giving them representative ‘voice’ in the institu-tions and processes that affect their lives and work.

The lives of the working poor in the informaleconomy come up short along each of these dimen-sions of poverty and well-being.

What about gender equality? While the under-standing of this concept may vary, depending on

“Poverty means working for more than 18 hours a day, but stillnot earning enough to feed myself, my husband, and my two children.”

Working poor woman, Cambodia (cited in Narayan 2000)

1 The numbers of rural to urban migrants are estimated to have peaked at around 75 million in the period from the late 1980s to the mid-1990s and to have tapered to around 70 million by the end of 2000 (Chen and Ravallion 2004, Weiping 2001). The decline in the poverty ratein China appears to have flattened after 1996 despite per capita GDP growth rates around 7% through 2001 (Chen and Ravallion 2004).

the lived experiences of different groups in differ-ent countries, the Millennium Declaration providesa consensus understanding according to whichgender equality means “equality at all levels ofeducation and in all areas of work, equal controlover resources and equal representation in publicand political life” (UN 2005).2 By 2005, in mostregions, the gender gap in primary and (to a less-er extent) secondary education had narrowed;women’s representation in national parliamentshad increased; and women had become a grow-ing presence in the labour market. But higher edu-cation remains an elusive goal for girls in manycountries; women still occupy only 16 per cent ofparliamentary seats worldwide; and they remain asmall minority in salaried jobs in many regions,while they are overrepresented in the informaleconomy (ibid.).

In addition, some of the measures of progressmay have contradictory outcomes for women. Forexample, women’s share of non-agricultural wageemployment, one of the four indicators underMillennium Development Goal 3, simply showswhether the share of women in such employmenthas increased or decreased; it does not show theconditions under which women work or the returnsto their labour. If women are concentrated in low-paid and unprotected forms of non-agriculturalwage employment, then an increase in their share ofsuch employment does not represent an increase ingender equality (see Chapter 3).

Employment in the 21st CenturyFor much of the 20th century, economic develop-ment – at least in Europe and North America –was predicated on the model of state-basedsocial and economic security as embodied in thewelfare state, the goal of full employment andrelated protective regulations and institutions (ILO2004a). However, by the 1980s, a new economicmodel began to take shape: one that is centredon fiscal austerity, free markets and the ‘rollback’of the state. Under this model, there are threemain policy prescriptions for economic develop-ment and growth: market liberalization, deregula-tion and privatization. While inflation has beenbrought under control in many countries, financialcrises and economic volatility have become morefrequent and income inequalities have widened(UNRISD 2005; ILO 2004a). More critically, thecentral goal of this new model – long-run, sus-tainable growth as the solution to uneven devel-opment – has not been achieved in many of thecountries that have embraced it.

The consequences of these policies in terms ofpoverty or gender inequality are rarely discussed inmainstream economic debates, nor are the cuts indomestic social spending and legal protection thatare often part of the orthodox policy mix. At best,there is a call for these policies to be complementedby investments in public goods such as education,health, infrastructure and by social policies to com-pensate the ‘losers’ in the processes of liberaliza-

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2 As UNIFEM and others have pointed out, gender equality also entails the transformation of gender hierarchies and social and economic structures that perpetuate inequality; and ensuring women’s personal security and right to live free of poverty and violence (see Heyzer 2001a,b; UNDP 2005).

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Vendors in a street market, Hanoi, Viet Nam. Photo: Martha Chen

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tion, deregulation and privatization. But the funda-mentals of free-market reforms, including theexpectation that employment and standards of liv-ing will increase along with economic growth andthat market interventions create distortions that mayupset this relationship, remain largely unchallenged.

In fact, these economic reforms, unless proper-ly managed, can have contradictory outcomes interms of poverty and gender inequality. They canoffer many opportunities for poverty reduction pro-vided that steps are taken to enable people who arepoor to gain rather than lose from the changesinvolved. On the other hand, they can leave poorercountries of the world – and the poorer section ofthe population within them – worse off than before.The consequences for those who are poor, espe-cially women, depend on who they are, where theylive, whether they are allowed to earn a livelihoodand what they do to earn it.

Without an explicit focus on increasing thedemand for labour, economic growth will not gener-ate as many jobs as needed, resulting in joblessgrowth. Moreover, without an explicit focus on thequality of employment, the jobs that are created maynot be regulated or protected. Recent economicgrowth has been associated with flexible labourmarkets, outsourcing of production and the growthof temporary and part-time jobs.

Countries around the world have adoptedlabour laws that tolerate and even promote labourmarket flexibility without much concern for thesocial outcomes of such policies in terms of pover-ty and gender inequality, and therefore without put-ting in place safety nets or unemployment compen-sation schemes (Benería and Floro 2004). During the1990s in Ecuador, for example, as part of thereforms initiated by the International Monetary Fund(IMF) and the World Bank, measures to increaselabour flexibility were incorporated in the labourcode, including: (a) the replacement of indefinitelabour contracts with fixed-term contracts and theuse of temporary, part-time, seasonal and hourlycontracts in hiring; and (b) restrictions on the right tostrike, collective bargaining, and the organization ofworkers (CELA-PUCE 2002, cited in Floro andHoppe 2005). As another case in point, theGovernment of Honduras is currently considering anew ‘temporary work law’ that would permit gar-ment factories to hire up to 30 per cent of their work-ers under temporary, instead of permanent, con-tracts. If this law is passed, those who are shifted totemporary employment would lose the benefits ofpaid leave, social security and an annual bonus andsee their earnings decline (Oxfam International2004; Kidder and Raworth 2004).3

In today’s global world, as economic insecurityand volatility are on the rise, the associated risks are

increasingly being borne by ordinary workers andworking communities rather than by large corpora-tions and their owners (ILO 2004a).4 This is due notonly to labour market deregulation but also to theglobal system of production that involves dispersedproduction coordinated through networks or chainsof firms. In the name of global competition, privatecorporations are hiring workers under insecureemployment contracts of various kinds or otherwisepassing economic risk onto others down the globalproduction chain. Authority and power tend to getconcentrated in the top links of value chains or dif-fused across firms in complex networks, making itdifficult for micro-entrepreneurs to gain access andcompete and for wage workers to bargain for betterwages and working conditions (see Chapter 4).Lead corporations often do not know how their sub-sidiaries or suppliers hire workers. This means thatmany of the newly employed in developing coun-tries and a growing share of the workforce in devel-oped countries are not covered by employment-based social and legal protections, thus joining theranks of those who have always been informallyemployed in developing countries.

From the 1960s through the early 1980s, it waswidely assumed that in developing countries, witheconomic growth, workers in the informal economywould be absorbed into the modern industrial econ-omy, as had happened historically in the industrial-ized countries. However, over the past two decades,the informal economy has persisted and grown bothin developing and developed countries, appearing innew places and guises.

This has led to a renewal of interest in theinformal economy accompanied by considerablerethinking on its size, composition and signifi-cance. A group of scholars and activists, includingSEWA, HomeNet and other members of theWomen in Informal Employment: Globalizing andOrganizing (WIEGO) network, have worked withthe ILO to broaden the concept and definition ofthe informal economy to include all forms of infor-mal wage employment and informal self-employ-ment (see Chapter 3). They have also been part ofa broader effort with the ILO, UNIFEM, and UNDPto work with both governments and civil societypartners to advocate for recognition and protectionfor people working in the informal economy.

In developing countries, informal employmentas defined above represents one half to three quar-ters of non-agricultural employment (ILO 2002b).The share of informal employment in total employ-ment is higher still, given that most of the agricultur-al workforce is informal: notably, small farmers andcasual day labourers or seasonal workers. Even onplantations and large commercial farms, only part of the workforce is hired under formal permanent

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3 As of April 2005, the law had not been passed in Honduras (Lynda Yanz, Maquila Solidarity Network, personal communication).4 ILO 2004a presents summary findings from People’s Security Surveys in 15 countries and Enterprise Labour Flexibility and

Security Surveys in 11 countries.

18 contracts. In developed countries, three categoriesof non-standard work – own account self-employ-ment, part-time work (in which women predominate)and temporary work – comprise 30 per cent of over-all employment in 15 European countries and 25 percent of total employment in the United States (ILO2002b). 5

Over the past two decades, as employment inthe informal economy has increased, women haveentered the labour force in large numbers. The con-nection between these two trends is not clear. Arewomen taking over ‘men’s jobs’ that, in the process,are being informalized? Are women entering infor-malized types of work that men now avoid? Or arewomen being actively recruited for new forms ofemployment that are, by design, informal? Whateverprocesses are at work, women tend to be over-rep-resented in informal employment and, more so, inthe lower-paid, lower-status and more precariousforms of informal employment (see Chapter 3).

Trade liberalization has created many employ-ment opportunities for women, particularly inexport-oriented light manufacturing. In fact, wherev-er export-oriented manufacturing industries havegrown, women have been drawn into this work(UNRISD 2005). But such growth has happened inonly a few countries, including Bangladesh, China,Malaysia, Mexico and Thailand (ibid.) In any particu-

lar industry, women in one country may experiencea job increase (garments in China) while in anotherthey experience a job loss (garments in SouthAfrica). Employment opportunities may move quick-ly from country to country so that gains experiencedin any country can be relatively short-lived.

In addition, the jobs created in export-orient-ed manufacturing—whether industrial outwork orfactory work— are not necessarily ‘good’ jobs, asthey generally are not covered by labour or socialprotections (see Chapter 4). Moreover, over time,as these industries have upgraded or matured andneed a more skilled workforce, men often takeover the jobs that women secured when the coun-try first opened its economy. Box 1.1 describesthe impact of the North American Free TradeAgreement (NAFTA) on the female work force inMexico. It shows that women’s employment firstgrew in absolute numbers, but over time fell rela-tive to men’s employment, forcing women to seekeven more precarious forms of employment. Realwages for women are lower, the percentage offemale-headed households has doubled and thereis a marked gender gap in earnings.

These workers and others who lose their jobswhen companies mechanize, retrench or shift loca-tions get left behind in the process of economicgrowth and trade liberalization. So do smallest-scale

NAFTA’s Impact on the Female Work Force in Mexico

Several studies of the impact of the 1994 North American Free Trade Agreement (NAFTA) on Mexico looked at the processes of liberalization andstructural reform on the labour force, and especially on the female labour force. These have shown that, as a result of changing economic and social condi-tions during the years prior to and following the signing of NAFTA, women joined the labour force at a faster rate than men. However, women’s jobs tendedto be low paid and informal. The growth in women’s employment did not necessarily lead to an improvement in their living standards. Women found morejobs in the vegetable and fruit export sector in agriculture but, with an increase in working hours and in employment on a piecework basis, their generallabour conditions often worsened.

In addition, while women’s employment in the maquiladoras (assembly and processing for export) grew in absolute terms, it fell in relative terms. Mentook many of the new manufacturing jobs created in the maquiladoras due both to push factors, as employment opportunities were limited outside the sec-tor, and to pull factors, as the industry and companies began to value higher-skilled workers. Between 1998 and 2004 women’s share of the jobs in themaquiladoras fell from 63 per cent to a little under 54 per cent.*

Since 2000, the maquiladoras have shed almost 200,000 jobs. Women have been consistently shed at a faster rate then men as the composition of thesector has shifted towards electronics and transportation equipment, which have a higher proportion of male employees than textile manufactures (Fleck 2001).

As maquiladora employment contracted and the Mexican economy faltered, women were forced to look for other types of employment, often accept-ing lower wages and poorer labour conditions. Jobs in the informal economy increased greatly, with a larger share of the female workforce (41%) than themale workforce (37%) in informal employment. White et al. (2003) calculate that between 1995 and 2000 the informal economy expanded by almost930,000 workers, more than half (56%) of which were women.

Real wages in Mexico are lower today than when NAFTA was implemented. In 1997, three monthly minimum wages were needed to purchase a basicfood basket. By 2000, the average household needed four times the monthly minimum wage to purchase a basic food basket. The numbers of householdswith three or more income-earners almost doubled between 1992 and 2000 – reflecting the need to earn more money to secure the same consumptionitems. These declines in real wages have occurred in a labour market that is highly sex-segregated. The percentage of employed women earning less thantwice the minimum wage is greater than that for employed men. Women with a basic education are segregated in jobs that pay far less than is earned bymen with a basic education. Furthermore, three out of every four rural women in 2002 worked without receiving any kind of payment. White et al. (2003)calculate that the gender difference in wages in 2000 is more than two weeks wages for a woman with a basic education, meaning that a woman mustwork 2 weeks more than a man to make up the difference in wages.

Source: UNIFEM, 2000; White, Salas and Gammage 2003; Polaski 2004; ECLAC 2004a.*Data for 2000-2004 from INEGI, Statistics of Maquiladora Export Industry.

5 Not all non-standard work in developed countries can be equated with informal work in developing countries, as some of it is coveredby formal contractual arrangements and legal protections (ILO 2002b).

Box 1.2Box 1.1

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producers and traders who have little (if any) accessto government subsidies, tax rebates or promotion-al measures to help them compete with importedgoods or in export markets. These ‘losers’ in theglobal economy have to find ways to survive in thelocal economy, many resorting to such occupationsas waste picking or low-end street trading.

Some observers paint rather idealistic picturesof the informal economy: people ‘volunteer’ or‘choose’ to work in the informal economy to avoidthe costs of formality (Maloney 2004); informal oper-ators are ‘plucky entrepreneurs’ (de Soto 1989); theinformal economy provides a ‘cushion’ during eco-nomic crises (World Bank 1998); and ties of solidar-ity and reciprocity within the informal economy pro-vide ‘an element of insurance and risk sharing’(World Bank 1995). Others argue that disadvan-taged social groups, especially women within them,lack access to the relevant skills, capital and stateresources that would enable them to secure betterpaid and more secure employment within the infor-mal economy (much less in the formal economy).Still others argue that firms choose to hire workersunder low-paid and unprotected contractualarrangements and that, within specific sectors of theeconomy, larger and more dominant firms constructbarriers to exclude the self-employed from betterand more secure opportunities (Breman 1996). Asthis report will illustrate, the informal economy ishighly segmented, so that there is some truth toeach of these perspectives depending which groupof informal workers the observers focus on. Thisreport will focus on the place of the working poor,especially women, in the informal economy.

A related theme is that working does not nec-essarily lead to poverty reduction. Many of thosewho work are not able to work their way out ofpoverty. In fact, labour market arrangements canserve to perpetuate poverty and disadvantage. Inaddition to more employment opportunities, thepoor need higher returns to their labour: thisdepends, in turn, on their portfolio of assets (phys-ical, human and social), their ability to compete inmarkets and the terms under which they compete(Osmani 2005). What is needed to reduce poverty,therefore, is a mix of policies to create afavourable environment and increase the assetsand competitiveness of the poor along withorganizing strategies and institutional changes toincrease their bargaining power.

Employment in the MDGs and PRSPsWork and employment have been the centralconcerns of the International LabourOrganization (ILO), which recently has champi-oned the notion of ‘decent work’ as a path out ofpoverty as well as a basic human right (ILO1999). As defined by the ILO, ‘decent work’ is

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employment with sufficient income and opportu-nities, rights at work, social protection, as well associal dialogue (i.e., negotiation and consultationbetween representatives of governments,employers and workers on issues of commoninterest relating to economic and social policies).As such, employment has also been part of thebroader development agenda within the UN sys-tem, including that of UNDP, UNIFEM, and otherdevelopment organizations.

Employment is also relatively high on the devel-opment agenda of the European Union, reflectingthe historical interest of European policy makers inemployment and labour markets as central to eco-nomic prosperity. Employment also features in manyof the regional and national debates on povertyreduction. For example, the 2004 ExtraordinarySummit of Heads of State and Government of theAfrican Union in Burkino Faso adopted a declarationand plan of action calling for employment to beplaced at the centre of poverty reduction strategies.

Perhaps not surprisingly, therefore, employ-ment is also mentioned in the mission statements ofthe international financial agencies. But when itcomes to policy prescriptions and practice, theseinstitutions are typically more concerned with highrates of economic growth than with high levels ofemployment. In large part this is because main-stream economists and policy makers, as well asthe Bretton Woods Institutions treat employment asan outcome rather than a target of macroeconomicpolicies and view interventions in labour markets ascreating distortions in market operations that caninterfere with expectations of economic growth(Säve-Soderbergh 2005).

The UN Millennium Declaration, adopted at theSummit, outlines a vision of a world based on free-dom from want and freedom from fear. This broadvision was translated into eight time-boundMillennium Development Goals, each with quantifi-able targets and indicators (see Box 1.2). The year formeeting the targets for most of these goals is 2015.

Employment creation is not one of the eightMDGs, and employment is neither a target nor anindicator under the first major goal of eradicatingextreme poverty and hunger.6 It is included as an indi-cator under Goal 3 of gender equality but, as current-ly specified, it is at best a crude measure of genderequality (see Chapter 3). There is also an indicator onyouth employment under Goal 8, reflecting interna-tional concern about the large and growing number ofunemployed youth around the world. The ILO (2003a)estimates that unemployment among the youngwas at least twice as high as unemployment in thetotal labour force in all regions around the world in2003, and that there will be over 500 million newentrants into the global labour force between 2003and 2015.

6 “Productive employment and decent work” have been added as priority goals in the draft Output Document of the UN GeneralAssembly’s President for the MDG Summit in September 2005.

In 1999, in response to civil society demands toreduce the unsustainable debt of poor developingcountries, the Bretton Woods Institutions agreedthat national poverty reduction strategy papers(PRSPs) would provide the basis for concessionallending by the World Bank and IMF and for debtrelief to the most heavily-indebted poor countries.The national PRSPs are supposed to be country-owned, expressing not only the perspective of gov-ernments but also the needs and interests of peo-ple, particularly the poor, solicited through a partici-patory process (Zuckerman and Garrett 2003). Theyare meant to represent government-owned, partici-patory development strategies for reducing poverty.

The employment policy content of PRSPs dif-fers from country to country. However, if we look atthe content of the documents, some reasonablegeneralizations emerge. Most of the PRSPs identifythe lack of decent employment opportunities ascontributing to high levels of poverty. And many ofthem single out the low quality and precariousnature of informal and agricultural employment asneeding to be addressed. In promoting sustainable‘pro-poor’ growth, the role of employment simplycannot be ignored.

The PRSPs’ record on recognizing the impor-tance of women’s labour – both paid and unpaid – isfar spottier. Some are silent on the issue; others giveit a token mention. Still others explicitly recognizethe connections among women’s paid employment,informalization and the feminization of poverty: forexample, Chad’s 2003 PRSP acknowledges thatwomen frequently face a higher risk of poverty due tothe low quality and instability of informal employment.

Although employment features prominently inPRSP diagnosis of the poverty problem, the pre-scriptive policy content is weaker. As mentioned,much more attention is devoted to the supply sideof the employment problem – that is, human capital,education and vocational training – than to the

demand side, namely, insuring adequate employ-ment opportunities. Often, demand for labour isseen as a by-product of productive activities. ManyPRSPs assume that growth will automatically gen-erate job opportunities that will reduce poverty.Some of the strategies do emphasize the need toinvest in labour-intensive production practices andsmall- and medium-sized enterprises (SMEs).However, little attention is paid to the quantity andquality of employment generated. The primary focusis either the enterprise (e.g., SMEs), a specific sector(e.g., tourism or agro-processing) or the amount pro-duced, not the employment outcomes themselves.

UNIFEM reviewed 41 PRSPs, of which 23incorporated some form of employment indicator aspart of the monitoring and evaluation process.7 Theunemployment rate, total employment or number ofsmall and microenterprises were the most commonindicators included. However, these indicators arenot the best for monitoring the well-being of workersin the informal economy, where underemployment,low earnings and unstable incomes are particularlyimportant.8 Furthermore, many of the countries lacktimely data resources to effectively monitor theemployment indicators they have identified.

Only five of the PRSPs reviewed set any kind ofexplicit target for employment. For example,Kenya’s framework targets 500,000 new employ-ment opportunities a year. Only Viet Nam’s strategyincludes an explicit target for women’s employment:by 2010, half of all new jobs in Viet Nam should beheld by women.

A recent UNIFEM study found that the gendercontent of the PRSPs is inadequate in much thesame way as is the employment content: the pre-scriptive recommendations are far weaker than thediagnostics; gender-specific recommendations arefrequently limited to a handful of issues or interven-tions (e.g., reproductive health or girls’ education);and gender-specific targets and indicators are insuf-ficient or absent altogether. In addition, the PRSPscontain little or no analysis of women’s unpaid carework (UNIFEM 2005b). This has broad implicationsfor the strategies’ ability to address feminized pover-ty, and particularly severe consequences for thePRSPs’ ability to address issues of women’s accessto employment and independent sources of income.

Finally, the PRSPs treat the question of employ-ment in general, and women’s paid work in particu-lar, in a piecemeal way. None of them present acoherent, integrated strategy for tackling the prob-lems of employment that the papers identified. Forexample, all the PRSPs stressed the importance of

Millennium Development Goals

Goal 1: to eradicate extreme poverty and hunger

Goal 2: to achieve universal primary education

Goal 3: to promote gender equality and empower women

Goal 4: to reduce child mortality

Goal 5: to promote maternal health

Goal 6: to combat HIV/AIDS, malaria, and other diseases

Goal 7: to ensure environmental sustainability, and

Goal 8: to develop a global partnership for development

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7 The PRSPs included Albania (2001), Armenia (2003), Azerbaijan (2003), Benin (2003), Bhutan (2004), Bolivia (2001), Burkina Faso(2004), Cambodia (2003), Cameroon (2002), Chad (2003), Djibouti (2004), Ethiopia (2002), Gambia (2002), Georgia (2003), Ghana(2003), Guinea (2002), Guyana (2002), Honduras (2001), Kenya (2004), Kyrgyzstan (2003), Lao People’s Democratic Republic(2004), Malawi (2002), Mali (2003), Mauritania (2000), Moldova (2004), Mongolia (2003), Mozambique (2001), Nepal (2003),Nicaragua (2001), Niger (2002), Pakistan (2004), Rwanda (2002), Senegal (2002), Serbia and Montenegro (2004), Sri Lanka(2003a), Tajikistan (2002), Uganda (2000), United Republic of Tanzania (2000), Viet Nam (2003), Yemen (2002) and Zambia (2002).

8 The focus on unemployment represents a developed country bias among policy makers; in developing countries, underemployment andlow-quality employment are more widespread than is open unemployment . The ILO (2003a) estimates that worldwide, in 2003, therewere nearly three times as many working poor earning less than US$1 per day (550 million) as unemployed persons (186 million).

Box 1.2Box 1.2

21

macroeconomic stability. However, they did notgo the extra step to explore what types of macro-economic policies would facilitate improvementof employment opportunities, what trade-offsmight exist between macroeconomic policiesand employment outcomes, and what the impactof economic stabilization would be on differentsegments of the labour force.

A draft of a 2004 UNDP review of 78 nation-al Millennium Development Goals reports foundminimal and inconsistent coverage of genderissues in employment in any of the goals. Of thereports reviewed, eight (10%) highlightedincreased access to employment for women as astrategy for poverty reduction under Goal 1, 25(32%) reported on wage gaps and income differ-entials and 15 (19%) mentioned domestic workand unpaid work under Goal 3. In addition, fivementioned unemployment and its consequencesfor young women under Goal 8. The review didnot indicate that any report highlighted women’sparticipation in the informal economy under anygoal. UNDP noted, however, that overall report-ing on gender equality had improved, comparedto a review of a smaller number of reports (13)undertaken in 2003: 54 per cent of the reportsfrom 2004 specifically mentioned women’s vul-nerability to poverty under Goal 1, compared toless than half in 2003 (UNDP 2005b).

Organization of this Report This report makes the case for an increasedfocus on informal employment, particularly thatof working poor women, in efforts to reducepoverty and promote gender equality. Chapter 2argues that understanding why women end up inthe most insecure types of informal employmentrequires understanding the totality of women’swork and the linkages among the different typesof women’s work: paid and unpaid, formal andinformal. It begins with a brief overview of effortsby women’s rights advocates and feminist econ-omists to improve understanding and measure-ment of the different types of women’s work. Itthen looks at the current context of women’spaid and unpaid care work, including demo-graphic trends, state social spending patternsand life-cycle concerns. A third section considersthe linkages – temporal, spatial, segmentationand valuation of work – between women’s paidand unpaid work, using case studies to illustrate.The final section again uses case studies to con-sider the intersection of gender and othersources of disadvantage (class, race, ethnicity,religion and geography) in the realm of work, andtraces out the links between occupational mobil-ity and recent trends in women’s migrationbetween developed and developing countries.

Chapter 3 provides recent statistical evi-dence on the size and composition of formal and

informal employment in both developing anddeveloped countries and reviews recent effortsto include in Millennium Development Goal 3more relevant indicators for gender equality inemployment, namely, employment by type andby earnings. The bulk of the chapter presents ananalysis of specially-tabulated data from onedeveloped country (Canada) and six developingcountries (Costa Rica, Egypt, El Salvador, Ghana,India and South Africa) on the size and segmen-tation of the total workforce (formal/ informal,agricultural/non-agricultural, men/women); onthe average earnings across these different seg-ments by sector and by sex; and on the povertyrisk (i.e., the likelihood of being from a poorhousehold) of working in these various segmentsby sector and sex. It concludes with a call forimproved labour force statistics and a betterunderstanding of labour markets.

Chapter 4 investigates the costs and bene-fits of informal employment for women and men.It begins with an analysis of the work arrange-ments of informal workers characterized by placeof work, employment relationship and productionsystem, all key determinants of the costs andbenefits of informal employment. It then presentsa new perspective on the assumed costs andbenefits of informal work; offers a causal modelof who ends up in informal employment and why;and provides evidence from field studies in Indiaand South Africa and case studies of occupa-tional groups among informal women workersthat illustrate the costs and benefits associatedwith different work arrangements. It concludeswith new ways of thinking about income povertyand the other dimensions of poverty from theperspective of the working poor; about genderand other sources of disadvantage for workingpoor women; and about the operation of informallabour markets.

Unless informal workers become organized,in whatever form works best for them, they willnot be able to negotiate effectively for supportivepolicy responses. Chapter 5 presents an overviewof the ways in which women workers in the infor-mal economy are organizing, emphasizing thecritical need for women to organize around theiridentity as workers and to have their own organi-zations or play leadership roles in organizations ofwomen and men workers. Support to women’sorganizing as workers in the informal economyrepresents an essential component of the futureagenda for everyone concerned about reducingboth poverty and gender inequality.

Chapter 6 presents a framework for policyand action in support of the working poor, espe-cially women, in the informal economy. It pres-ents good practice examples, drawn from a widerange of countries. It concludes with a call forconcerted action on four priority areas.

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2CHAPTER The Totality of Women’s Work

Basket weaver and child, Eritrea.

Photo: GiacomoPirozzi/UNICEF/HQ97-

1091

To understand the role of employment inperpetuating or reducing poverty, includ-ing feminized poverty, we need to look atwhere working women and men arelocated in the global workforce and at

the nature of work in today’s global economy.First, however, it is important to look at the totalityof women’s work. Women’s ability to participate inthe labour market is contingent on other demandson their time, especially for unpaid work in thehousehold and community. Understanding therelationship between women’s work and povertytherefore requires a comprehensive view of formaland informal paid work, subsistence production,unpaid work in family enterprises, unpaid carework for household members and community vol-unteer work.

Studies of women’s work generally focus ondifferent aspects of their work rather than thewhole. Analyses of women’s paid employmentrange from an examination of the ‘glass ceiling’that constrains highly skilled women from advanc-ing as far as men, to a focus on job segregationand the relegation of working class women to pinkcollar jobs, lacking the same pay levels or jobsecurity as men in blue collar employment.Another focus is ‘the care economy’ and women’srole in unpaid care work, inside households and incommunities. With some exceptions, however, theliterature has tended to underestimate the impor-tance of women’s informal work, especially indeveloping countries.1

At the same time, increased attention to thegender dimensions of HIV/AIDS has highlightedthe fact that women in many countries are beingpulled out of productive work, especially in agri-culture, to take care of the ill and the dying (Heyzer2004; UNAIDS et al. 2004; Budlender 2003). Thishas provoked a new look at the ways in whichwomen’s unpaid care work in the household andcommunity constrains their ability to access orcontinue in paid employment, and illuminates thehidden costs of shifting the provision of health andwelfare services to women’s unpaid care work.

This chapter looks at the ways in whichwomen’s unpaid care work constrains theiraccess to or participation in paid employment,focusing on women’s low-paid informal work. Ithighlights global patterns of stratification betweenwomen and men, and between richer women andpoorer women. Four cases illustrate the linksbetween the different types of work, looking atfour inter-linked dimensions: temporal and spa-tial and the segmentation and valuation of work.A further selection of cases illustrates the inter-section of gender with class, ethnicity, caste andgeography, and how these all combine to locatethe working poor, particularly women, in precari-ous forms of informal employment and thus toperpetuate poverty.

Understanding and Measuring Women’s WorkSince the 1970s a number of women’s organiza-tions and feminist scholars have focused onimproving the way in which women’s work isconceptualized and measured, highlighting fivedistinct types of work: formal market work, infor-mal market work, subsistence production, unpaidcare work and volunteer work (Benería 1993;UNIFEM 2000). Only formal market work is ade-quately measured by conventional data collec-tion methods; the others all require the design ofbetter methods of data collection or, at an evenmore basic level, new conceptual frameworksand definitions.

In official statistics, the measurement of workand production hinges on the boundary set by theSystem of National Accounts (SNA) (UN 1995,2000). Work that falls within the boundary is con-sidered ‘economic’ while work that falls outsidethe boundary is considered ‘non-economic’.Those who perform only ‘non-economic’ activitiesare considered ‘economically inactive’. Formalmarket work falls clearly and neatly within the pro-duction boundary. Informal market work and alarge part of subsistence production (i.e., produc-tion and processing of food crops) have always

“When I had to go to work, I used to worry about my child. Iwould take him with me to the tobacco field. But my employer

objected. Then I would leave him at home, but I still worried abouthim. But what could I do? I had to earn, and I had no option.”

Agricultural labourer, India (cited in Dasgupta 2002)

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1 Exceptions include early work on specific regions (e.g., Heyzer 1986; Benería and Roldán 1987) as well as more recent work onthe global labour force (see, e.g., Pearson 2004).

fallen within the production boundary, in principle,but conceptual and methodological challenges tofully measuring and properly classifying women’sinformal activities remain. Other parts of subsis-tence production and unpaid housework and fam-ily services were excluded from the productionboundary until 1993.

As part of the 1993 revision of the System ofNational Accounts, the production boundary wasextended to encompass the production of allgoods for household consumption, including theprocessing and storage of all agricultural prod-ucts; the production of other primary products,such as mining salt, carrying water and collectingfirewood; and other kinds of processing, such asweaving cloth and making garments, pottery,utensils, furniture and furnishings (UN 2000). Therecognition of subsistence production of goods as‘economic’ activities was in great part due to theefforts of women’s rights advocates working atboth the national and international levels. Despitetheir efforts, however, the provision of domesticand personal services by household members forconsumption within the household, such as cook-ing and cleaning plus care for children and the eld-erly, continued to be left outside the productionboundary. Again in an effort to improve data on thefull contribution of women to the economy, the1993 SNA recommended that valuation of activi-ties outside the SNA boundary be undertaken in‘satellite accounts’ outside the national accounts(UN 1995, 2000).

For many years the women’s movement ingeneral and feminist economists in particular haveadvocated that social and economic policies takeinto account their impact on women’s unpaid care

work. Progress of the World’s Women 2000 usedthe term ‘unpaid care work’ to refer to “women’sprovision of services within households and com-munities” (see Box 2.1). As that report pointed out,not all care work is unpaid and not all unpaid workinvolves care. Much care work is done by paidworkers (e.g., domestic workers, nursing assis-tants, social workers), while the unpaid work thatmany women do for subsistence production andfamily enterprises does not involve care.

One way to measure unpaid care work isthrough time-use surveys. These surveys gatherdata on what women, men and children do overthe course of the day, and provide information onall types of work. They also form the basis forsatellite accounts. In response to the recommen-dation of the Beijing Platform for Action, theUnited Nations Statistics Division (UNSD) devel-oped an international classification of activities fortime-use statistics that is sensitive to the differ-ences between women and men, and between girlchildren and boy children, in remunerated andunremunerated work.2

In 1993, largely due to concern with theneed for improved measurement of women’seconomic activity, the International Conferenceof Labour Statisticians (ICLS) agreed on a definition of the informal sector (UN 1995).Subsequently the ILO, the International ExpertGroup on Informal Sector Statistics (the DelhiGroup) and the WIEGO network have workedtogether to broaden the concept to cover certaintypes of informal employment that had not beenincluded. The expanded definition includes self-employment in informal enterprises (i.e., small andunregistered enterprises) and wage employmentin informal jobs (i.e., unregulated and unprotectedjobs) for informal enterprises, formal enterprises,households or for no fixed employer (see Chapter3). Guidelines to implement this definition wereendorsed by the ICLS in 2003.

While pressing for change in statistical con-cepts and definitions, women’s advocates havealso requested new methods of data collectionthat can capture more fully women’s subsistenceand informal production, which tend to be under-counted in national censuses and surveys. Forexample, beginning in the early 1990s UNIFEMsupported work in countries in Asia to improvedata collected in national censuses on women’swork. And in 1995, the Fourth World Conferenceon Women, in its recommendations to improve anddisseminate sex-disaggregated data, proposedseveral actions to develop a more comprehensiveknowledge of all forms of work and employment.

Despite this progress, we are still a long wayfrom adequately measuring different types of

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Unpaid Care Work

The term ‘unpaid care work’ is used to refer to the provision of serviceswithin households for other household and community members. It avoidsthe ambiguities of other terms, including ‘domestic labour’, which canrefer both to unpaid care work and to the work of paid domestic workers;‘unpaid labour’, which can also refer to unpaid care work as well asunpaid work in the family business; ‘reproductive work’, which can referto unpaid care work as well as giving birth and breastfeeding; and ‘homework’, which can also refer to paid work done in the home on subcontractfrom an employer.

Each word in the term ‘unpaid care work’ is important:

� ‘unpaid’ meaning that the person doing the activity does not receive awage for it.

� ‘care’ meaning that the activity serves people and their well-being.� ‘work’ meaning that the activity has a cost in terms of time and energy

and arises out of a social or contractual obligation, such as marriageor less formal social relationships.

Source: UNIFEM 2000.

Box 2.1Box 2.1

2 For details see http;//www.un.org/dept3/unsd/timeuse/inter.htm

women’s work. What is primarily needed is fornational statistical systems to incorporate in their regular labour force surveys and in periodictime-use surveys the new concepts and meas-urement strategies, including the expanded definition of informal employment and suggestednew employment indicators for MillenniumDevelopment Goal 3 detailed in Chapter 3.

Mapping Women’s Paid and Unpaid WorkOver the past three decades women’s labour forceparticipation rates have been increasing in mostparts of the world. This is not true of the transi-tional economies of Eastern and Central Europe,where employment rates for both men and womenhave dropped since 1990 (UNRISD 2005). Also, inthe Middle East and North Africa, women’s labourforce participation rates remain very low. However,the general trend has been towards an increase inthe numbers of women working. What does thismean in terms of women’s economic security andrights? What does it imply for gender inequalityand poverty? To answer these questions we firstneed to look at the impact of wider forces onwomen’s work as a whole, both paid and unpaid.These forces are both macro, including the widereconomic trends mentioned in Chapter 1 as wellas state-level social spending and broad demo-graphic trends, and micro, including the differentrelationships individuals have to the labour marketat different periods of their lives and the daily real-ity of balancing competing demands on their time.

State social spending, the labour marketand care workAs noted in Chapter 1, international financial insti-tutions as part of their free market policy prescrip-tions have encouraged governments to adopt aset of economic policies designed to control infla-tion and enhance growth. These include trade lib-eralization, market deregulation, reductions ingovernment employment and privatization of serv-ices (e.g., health, education, welfare, housing) for-merly paid for by the state. All of these policiesimpact on gender relations, women’s work and theprovision of care.

In addition to household size and composi-tion, and the division of labour within the house-hold, women’s ability to engage in paid employ-ment is dependent on state policies that encour-age or constrain their participation (e.g., throughthe provision of affordable child care). The state isalso a provider of employment in health, educationand welfare service sectors, and as such helpsshape the labour market; in many countrieswomen make up most of the state-employedteachers, nurses and social workers. These serv-ice sectors are located at the nexus between pub-lic and private sectors, formal and informal care,

and low-paid and unpaid care, and are thus criti-cal in understanding women’s paid and unpaidlabour. Changes in state social provision, com-bined with changes in women’s participation in thelabour market, shift the boundaries between paidformal and informal care work, and between theseand unpaid care work. While this is true in bothdeveloped and developing countries, the meagresupply of state services in many developing coun-tries means that women are bearing a heavy bur-den of unpaid care work, often impeding their abil-ity to earn a livelihood.

With regard to health-care provision, coun-tries in the global North have moved away fromuniversal health services towards various types offee-based care, or public-private partnerships,sometimes with a residual free (and usually poorerquality) public service for those who cannot affordto pay. It is widely recognized that it is women whopay the costs of this individualization of care, asthe increased time spent taking care of familymembers limits both their participation in paidemployment and their leisure (Pascall and Lewis2004). Wealthier families can buy health care forthemselves, and/or pay someone else to providecare. After bearing children, better educatedwomen can pay for childcare and keep theircareers; less well educated women are likely toreturn to poorly paid, part-time jobs in an effort tobalance unpaid care work with earning an income.

In Europe, many countries have shifted theway in which they fund paid care work. In the past,the typical pattern was that the state or municipal-ity either provided care-givers or funded otherorganizations to provide care. Now the tendencyis to provide cash funds directly to those needingcare so that they can purchase their own carefrom others. In France, this shift was “part of amore general policy to stimulate low paid employ-ment for women” (Ungerson 2003: 394). In theNetherlands, it was intended to convert unpaidcare work to formal paid work, and was “specifi-cally directed towards pulling informal economicactivity into the formal labour market, and workersinto the social security system” (ibid: 384).

In addition to these job-creation and employ-ment regulation outcomes, this shift in fundingcould also result in greater empowerment of thosecared for, giving them more choice about whom toemploy and on what terms. However, those beingcared for may have difficulty getting the informa-tion about care workers they need to make aninformed choice. And, importantly for this report,the care worker who used to be employed full-time by the local welfare office may find that her orhis work as the direct employee of the personneeding care is now more precarious, with lesssecurity and fewer benefits.

In broad terms, the advanced welfare stateswere built on the idea of stable nuclear familiesthat include a male breadwinner in permanent

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employment. The man’s income would supportthe family; his receipt of the so-called ‘socialwage’ – including health insurance for him and hisdependents, pension benefits and insuranceagainst unemployment and disability – would pro-vide security for the entire family. This ‘malebreadwinner model’ has been replaced by the‘adult worker model’, which assumes that bothwomen and men are employed. What is not rec-ognized, however, is that women’s decisionsabout work are still largely dependent on ‘theunarticulated dimension’ of the male breadwinnermodel: unpaid care work. Without state supportfor this work, “women are being asked to bear themain burden of welfare state restructuring” (Lewis2002: 333).

In former communist countries, governmentsencouraged women to participate in the labourmarket on equal terms with men. This involvedextremely high rates of state social spending, espe-cially on childcare, while little attention was given tofinding ways of changing the gendered division ofcare work (Pascall and Lewis 2004). In contrast,some European countries have provided incentivesto working men to engage in parenting by, forexample, providing relatively generous paternityleave. However, paternity leave is not taken up asextensively as it could be (Orloff 2000), and it isnoteworthy that policy initiatives for greater involve-ment of men have focused on men’s role as fathersrather than as general care providers.

In most developing countries, in contrast, thereality for most people is that state provision ofeducation, health, welfare and childcare serviceshas always been limited. Following structuraladjustment, even those limited services havebeen curtailed. In education and in health, user-fees are now widespread and health care isdesigned to target those who can pay rather thanthe population as a whole. The cuts in state serv-ice provision were meant to encourage greatermarket provision, but markets do not readilyrespond to poor people and their need for socialservices. In some countries, international aid hascompensated for cuts in state provision, but thisleaves social service provision vulnerable tochanges in donor thinking about what servicesshould be supported. And while faith-based andcommunity-based organizations, as well as moreformal local welfare organizations, may make animportant contribution to health, education andwelfare, they are few and far between in ruralareas, where the greatest poverty may be foundand where it is more difficult to leverage access toother forms of support.

At the same time that the state has cut child-care provision and privatized its health and welfareservices, women have entered the labour force inlarger numbers in both developed and developingcountries, partly due to the inability of householdsto survive on a single worker income. Yet with few

exceptions, there is little evidence of men takingon substantially more care-giving responsibilities,and insufficient attention is given to policies thatencourage men to do so. As a result, women arepaying the costs of free market economic policyprescriptions. And the changes in women’s pat-terns of paid work seem to have little impact on“the most ubiquitous and long-lasting conceptionof the woman (which) in virtually all countries andtraditions of the world, is as a giver of care: home-maker, mother, wife, tender of the needs of theelderly – in general, a supporter of the needs andends of others” (Nussbaum 2005: 3).

Demographic trends and paid and unpaid workA number of demographic trends also affectwomen’s work. While the best known is fertility,and its link to women’s labour force participation,also important are population ageing and migra-tion. The impact of these trends on both employ-ment opportunities and unpaid care work for dif-ferent groups of women are particularly relevant.

The world’s population is ageing. The moredeveloped regions have led this process, as fertil-ity is still relatively high in the less developedregions. However, even in the less developedregions more rapid population ageing is anticipat-ed. Trends in the number of persons of workingage (15 to 59 years) are especially important. Indeveloped regions, while the proportion of theworking age population increased slightlybetween 1950 and 2005 from 61 per cent to 63per cent, a decline to 52 per cent is expected by2050 (UN 2005). In less developed regions theproportion of the working age population isexpected to decline slightly, from 61 per cent in2005 to 59 per cent in 2050. However, among theleast developed countries the proportion is pro-jected to rise from 53 per cent in 2005 to 61 percent in 2050. These trends have implications foremployment, for the provision of paid and unpaidhealth and welfare services, and for unpaid carework. Developing regions must somehow createjobs for the growing working age population, whiledeveloped regions must find a way to support thecare needs of growing numbers of older persons.Yet developing regions will also face this challengein the not too distant future.

Looking at the relationship between demo-graphic changes and the increase in paid domes-tic work in Latin America, Barrientos (2004) offerssome possible explanations about supply anddemand that may be generalized to other regions.He notes that population ageing may be creatinga demand for long-term care of elderly people, orthe entry of more women into the labour marketmay be creating a market in household services.Alternatively, the supply of women in domesticwork could be a response to their own need formore household income, related to the decline in

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men’s incomes associated with labour informal-ization and rising unemployment.

China, with 1 billion people (one sixth of theworld’s population), is undergoing rapid demo-graphic change (Cook 2003) marked by a rapidlyageing population as well as exceptionally low fer-tility. The transition to a market economy hasoccasioned both rapid economic growth andwidespread unemployment. The ‘one child’ policymeans that the unemployed older generationshave a limited number of children to support them.There is a marked gender imbalance in the chil-dren who are currently being born, based on apreference for sons, with boys significantly out-numbering girls. Among other problems, this willplace great strain on the care-giving responsibili-ties of decreasing numbers of women – unlessmen become more active providers of care.

Some developing countries have experiencedreverses in the demographic transition, mainly dueto the HIV/AIDS pandemic. Over the last twodecades, life expectancy has decreased dramati-cally in some sub-Saharan Africa countries: inSouth Africa, for example, life expectancy at birthfell from over 60 years in the mid-1990s to slightlyover 40 years by 2010 (Dorrington and Johnson2002). This has increased the amount of unpaidcare work and voluntary community work that fallson women, as the formal health-care system inmany countries is breaking down. At the sametime, in sub-Saharan Africa, the HIV/AIDS virusaffects women in greater numbers and at ayounger age than it does men (UNAIDS et al.2004).

Worldwide, the growing number of youngpeople also has implications for employment cre-ation. The ILO estimates that unemploymentamong the young was twice as high or more asunemployment in the total labour force in allregions in 2003. It also estimates that there will beover 500 million new entrants into the globallabour force between 2003 and 2015 – the MDGtarget year for reducing extreme poverty andhunger by half (ILO 2003a). About 50 per cent ofthese new entrants will be young women.Recognizing this, Millennium Development Goal 8includes an indicator on youth employment.

With regard to migration, employment hasbeen a major factor in the movement of personsbetween regions, countries and rural and urbanareas within countries. Women are increasinglyentering the migration stream, both within theirown countries as well as to other countries (UN2000). While initially women migrated mainly tojoin their male family members, increasingly theyare moving as autonomous individuals. This haseffects on the labour market in the countries theymove to, as well as on labour markets and careresponsibilities in the countries, communities andhouseholds they leave behind (ILO 2004b).

Life course changesWork and employment are a source of as well asa response to risk and vulnerability, which peopleexperience differently over the course of theirlives. Life course analysis helps to identify risksarising from a person’s relationship to the labourmarket, even where this relationship is indirect, as

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Women carrying grass used for fodder and fuel, Nepal. Photo: Martha Chen

in the case of infant needs. Table 2.1 gives anoverview of work-related risks and vulnerabilitiesat different stages of the life cycle.

Periods in a life cycle are demographically,physically and culturally dependent, and changeover time. There are overlaps between the differ-ent stages, and some people may not go throughall of the stages. Not all men and women marry orhave children. There are pressures for or againstthe use of child labour in different countries, anddifferent demands on girls compared to boys withregard to household and other tasks. Societies inwhich girls get married and have their first childrenin their early teens contrast with those wherechildbearing is generally much later, and where thedecision to have children at a later age is con-nected to decisions about employment. ‘Old age’

has a different meaning in a country such asJapan, where life expectancy is now over 80,compared to Botswana, where until recently it wasaround 70 but where it is now less than 40.

Bearing these differences in mind, Table 2.1highlights the risks and vulnerabilities inherent inthe relationship between women’s employmentand responsibility for care work at different stagesof the life cycle, setting up conditions for the gen-der specific transmission of poverty to the nextgeneration. Cuts in state provided child care serv-ices, for example, may lead to girls being pulledout of school to fill the care gap – with lifelongeffects on their ability to enter the labour marketand earn a decent income.

The gendered nature of these life cycle risksand vulnerabilities can be seen clearly in patterns

Risks and Vulnerabilities Associated with Employment at Different Stages of the Life Cycle

L i f e c y c l e s t a g e T y p e s o f a s s o c i a t e d r i s k s a n d v u l n e r a b i l i t i e s

Very young children Nutritional risks to children of working and non-working mothers, with lifelong developmental deficits

0 to 4 Delays in early cognitive development if left with an inappropriate care-giver

Acute vulnerability to disease and infection with poor access to health services due to parents’ low income

Exposure to toxic fumes, dust, extreme heat and cold, chemicals and pesticides (in homework and/or when

infants accompany mothers who engage in street trading, agriculture, small-scale mining)

Children 5 to 12 Risk of not attending school because of domestic or income earning responsibilities for girls vs. boys

Invisibility of young children’s work, whether as ‘normal’ household responsibilities or in non-family enterprises

when it is tied to parents’ employment

For working children, the triple burden of jobs, unpaid care work and schooling and its long-term impacts on

opportunities and productivity, and the differing effects on girls and boys

Lower access to school associated with parents’ low income and the differing impact on girls and boys

Adolescents 13 to 19 Vulnerability of (especially girl) children to early withdrawal from school

Triple burden of job, unpaid care and schooling and the long-term impact on opportunities and productivity and

differing effects on girls and boys

Entry into high risk employment categories, hazardous industries, prostitution, etc.

Young adults in their 20s and 30s Lack of access to financial institutions/asset building opportunities

Loss of employment or employment insecurity for women through pregnancy and childcare

Move from double to single-income family through pregnancy; men may have to work harder or take additional work

Middle adults Loss of employment, or employment insecurity through care for both younger and older family members

Costs of illness and death, especially in context of HIV/AIDS

Expectation that women in this age group do unpaid volunteer care work

Older people Loss of income when work is lost, in absence of work-related provision for retirement and/or state support

Continuing to work due to income insecurity and/or to support dependents

Widows’ loss of access to late husband’s family resources

Onerous child care responsibilities in countries where AIDS or military destabilization has resulted in few middle

age adults and high numbers of children in stress

Source: Adopted from Lund and Srinivas (2000: 37, 38).

Table 2.1Table 2.1

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of widowhood and remarriage. Older men who arewidowed are far more likely to re-marry than olderwomen. In India, for example, 38 per cent ofwomen over age 50 are widowed compared to 10per cent of men over 50 (Government of India2001). Elderly widows cannot count on their latehusband’s kin or their own kin to maintain them,so many of them have to work well into their sev-enties, doing whatever work they can find and areable to do (Chen 2000).

In general the greater longevity of women andmen means more years of responsibility for thecare of older parents by their sons and daughters.Where increased longevity coincides with high fer-tility, a woman of the middle generation comes tobe responsible for the care of her parents as wellas for her own children and grandchildren.

The Dynamics of Women’s Paid and Unpaid WorkUnderstanding the relationship between differenttypes of women’s paid and unpaid work helpsshed light on the dynamics of poverty and genderinequality. If job creation programmes are to ben-efit women, for example they must take intoaccount the impact of expectations aboutwomen’s role in unpaid care work, in terms ofwomen’s ability to access or sustain paid marketwork. Four dimensions help to illuminate theserelationships.

The first dimension is temporal. Time-usestudies have shown that women spend more timein work overall, spend fewer hours in paid workand in general have less discretionary time thanmen do (UN 1995, 2000). Women spend moretime than men doing unpaid care work and house-work, with multiple and overlapping activities,such as childcare, cooking and cleaning. At thesame time they also engage in paid and unpaidactivities, for example, doing piece-rate paid workwhile cooking and childminding. In developedcountries, a high percentage of part-time workersare women, who combine paid market work andunpaid care work. In developing countries, womenspend a good deal of time in unpaid food produc-tion and processing, and fuel and water collection,which limits their time for both paid market workand unpaid care work.

A second dimension is spatial. The location ofan individual’s work may be in his or her ownhome, in somebody else’s home, on a farm, in aforest, on a street or in an office. Women’s obliga-tions to do unpaid care work often oblige them towork at home, while their decision to migrate insearch of work has implications for their ownunpaid work for their families. Migration may beinternal, usually from rural to urban areas, cross-border or further afield; it can be temporary, per-manent or alternate between the two. In all cases,women migrants with dependents have to findsubstitute care-givers. In their receiving countries,

being without their dependents may enable themto do more than one paid job (perhaps a full-timejob that carries secure status and social protectionbenefits). The temporal dimension may also comeinto play, with an interruption in income earningbetween leaving work in the home country andtaking up new work after migrating.

A third dimension is that of employment seg-mentation. Women’s role in unpaid care worktends to channel them into similar occupationsand sectors in the paid economy: notably, theclothing and textile industries, teaching, childcare,health care and domestic services. It also chan-nels them into certain types of employment thatare more precarious in terms of earnings and ben-efits such as part-time work or informal wagework.

Employment segmentation is closely relatedto the fourth dimension, the valuation of differenttypes of work. The fact that women’s unpaid carework is given a low value means that even whenthese activities are monetized or commodified, thework is still undervalued:

The fact that these types of work – sewing,child care, and housework – are done ‘free’by so many women within their own house-holds, suggests (a) that there are few skillsinvolved – it is something that women, atleast, can do ‘naturally’; and (b) that the workhas low value, because it can be obtainedfree in other circumstances. The result is lowwages and low status (Budlender 2002).

In market or employment transactions, thisunder-valuation is implicit and unplanned, reflect-ed in low wages and low status. Furthermore,when efforts to estimate the value of unpaid carework are based on a comparison with the wagesof under-paid care workers, the resulting valuationwill also be low.

These four dimensions are closely linked,especially the temporal with the spatial, andemployment segmentation with the valuation ofdifferent types of work. They are used here, singlyand in combination, to show the linkages betweendifferent types of work, and the effects of theselinkages on women’s disadvantage in the labourmarket. They are also a means of identifying thetrade-offs that must be made between differenttypes of work, and the costs to those who makethem in terms of job and income security.

Hidden costs of combining employment,paid and unpaid care workPart-time employment may be formal in status, asin the case below, and may enable women to carefor family members while earning an income. Thecosts for women of reconciling paid work andunpaid care work, however, are usually hidden.The case of Lucy and Jack illustrates the trade-offs between full-time and part-time employment,

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and between paid work and unpaid care work –and the costs of these trade-offs in terms of men’sand women’s present and future security.

Caring for an elderly relative in SouthAfrica: Lucy and Jack Lucy is 38 years old, and is a full-time manager ofthe cashiers at a supermarket. Her job carrieshealth insurance and a retirement savingsscheme. She is in line for promotion to middlemanagement. Her husband Jack works for asecurity firm; the job is relatively secure, but withlow earnings (lower than Lucy’s), long hours andno retirement benefits. They are financially stable,but not well-off, and have to budget carefully. Theyemploy a domestic worker two days a week.

Their three children are 16, 14 and 8 years oldand are all in school. Lucy would prefer to workpart-time, as she would like to be at home whenthe children get back from school each day.However, she and Jack are anxious to providetheir children with tertiary education, as they seethis as the key to more secure and better-paidfutures for the children. What makes it possible tosave for this is Lucy’s full-time salary. They depositwhat they estimate to be the difference betweenthis and what she would earn if she worked parttime into a special ‘education account’, as a wayof managing savings.

Then Jack’s widowed mother has a stroke, ishospitalized and cannot live independently. Lucyand Jack are her only family support; there is noaffordable accommodation in old age homes;besides, they feel obliged to look after her. Shecomes to live with them. She does not need full-time nursing care, but does require intensive careat certain times of the day – when dressing, toilet-ing and eating. Lucy shifts from full-time to part-time work, and the hours of the domestic workerare increased so that she is always in the homewhen Lucy is not. Jack’s mother lives with themfor 10 years before she dies.

What do we learn from this case? First is thedegree to which care work is assigned along gen-der lines. There was no consideration that Jackshould move from full-time work to part-time workto take over any care-giving, despite the fact thatit was his mother who required care. Second is theamount of income loss that accompanied Lucy’sshift to part-time work in order to do the carework. Costs were calculated of her direct loss ofearnings, or what the savings in the educationaccount would have been had Lucy kept the full-time job and continued to bank the difference. Thesavings over 10 years would comfortably haveseen the three children through expensive tertiaryeducation.

Third are the costs of the ‘temporary’ 10-yearinterruption in Lucy’s career in terms of her ownjob satisfaction and the loss of a pension to sup-port her own and Jack’s retirement. There is also

the reduced education of their children, whichleaves them less likely in future to be able to takecare of their ageing parents.

Finally, we see the relationship between shiftsin the employment status of professional womenand that of less skilled women workers. Thedomestic worker was asked to work additionalhours, that meshed with Lucy’s reduced hours, tohelp take care of Jack’s mother. She was alsorequired to shift her role from domestic work tocare work. This was purely an informal arrange-ment, and the domestic worker’s wage did notchange as a result of the new nursing skills shehad to learn and practice. She ‘added value’, butreceived no recognition for this.

Low income, poor working conditionsand quality of unpaid care Most women are confronted at some stage of theirlives with having to balance work and child orelder care. Better-off women can afford to payothers to look after their children or elderly rela-tives. For poorer women, if paid care is not avail-able or not affordable, then the ability to workdepends on whether there are dependable (usual-ly female) household members to assist with care.

Working from one’s own home, whether as anunpaid contributing family member, an industrialoutworker or in self-employment, enables caringfor children or elderly relatives to continue along-side this work. Where a woman has to rely on paidor unpaid care-givers while she is away at work,the mere presence of such care-givers does notnecessarily guarantee an appropriate quality ofcare, as the following case illustrates.

Low paid employment and child care:mothers in the clothing industry inLesothoTrade liberalization has led to the rapid growth ofthe garment industry in Lesotho, opening up newemployment opportunities for young women inthis extremely poor country. A study of womenworkers in these factories looked at the relation-ship between their working conditions and theircapacity to care for their children (Sekhamane2004). The author interviewed a sample of workingmothers, along with the women who took care oftheir young children, and observed how the carewas managed. Her sample was drawn fromwomen with a malnourished child under threeyears old who had applied to a programme fornutrition supplements. The findings, while limitedto the sample, allow insights into the ways inwhich women’s low paid employment affects theirability to secure good quality paid and unpaid carefor their young children.

The major obstacle mothers faced were longand inflexible work hours, between 10 and 12hours a day during the week and up to 10 hours aday at weekends. During periods when hours

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were even longer, women reported never seeingtheir children awake. They were allowed no timeoff to care for or get health care for their children.Workers seeking medical care for themselves hadto produce a medical certificate simply to protecttheir jobs, but their wages were still deducted forthe time off. Some women thus avoided both pre-natal and post-natal clinics, risking their ownhealth as well as that of their children.

Economic need and low wages meant thatmost mothers had returned to work one weekafter giving birth, thus limiting or stopping breast-feeding. Infant formula is expensive, so often theirinfants received severely diluted milk and/or sugarsolutions. Yet some of the women spent theirmoney on socializing and drinking after work,placing the nutritional and health status of theirchildren even more at risk. Their low wages alsolimited their choice of paid care-givers, relying onunpaid relatives, who were usually very young ormuch older. Young care-givers often behaved asone might expect: neglecting their duties, becom-ing easily distracted and occasionally even eatingthe child’s food.

This study, while small, shows the impact oflow paid work on poverty and parenting, feedinginto a generational cycle. New employmentopportunities often entail low wages and workingconditions that compromise workers’ health andconstrain their ability to seek care, limit theirchoice of care-givers, and lead to poor feedingroutines for infant children. This cycle will transmitpoverty and poor employment possibilities to thenext generation. Yet despite the poor workingconditions, employment in the foreign-owned fac-tories represented a step up for the majority of theworking mothers, either due to their previous lackof employment or compared to their formeremployment.

The costs of women’s volunteer work inthe community Across the world, volunteer work is promoted as asocial and public good, as a sign of social solidar-ity and as having benefits for both the giver andthe receiver. In developed countries, volunteerwork is usually viewed as supplementary to otherforms of social services or support. In many poorcountries, however, where health and welfareservices are scarce or non-existent, voluntary carework may be the only form of support there is. Thekind of volunteer work that takes place as part ofan organized programme is usually subject to gen-der role expectations and comes at a cost to vol-unteers (Benería 2003).

A number of studies are investigating thecosts of voluntary and unpaid work by familymembers in the context of HIV/AIDS (Ogden et al.2004; Akintola 2004). The scale of this pandemichas made more visible the care work that is need-ed for other common chronic diseases such as

tuberculosis and malaria. It is largely women whodo the care-giving, and this detracts from timeavailable to do other work. In the rural context, thisespecially refers to subsistence production.

A comparative study of home-based careschemes for people with AIDS was carried out inSouth Africa and Uganda. The schemes used bothunpaid family members and non-kin volunteers,with different levels of support from and interac-tion with non-governmental organizations (NGOs)and government. In Uganda, the organized com-munity volunteer work reduced the capacity ofcare-givers to grow their own food. As one volun-teer said: “The patient is hungry and we are hun-gry too” (Akintola 2004: 25-26). HIV/AIDS meantlowered household incomes along with greaterhealth-related expenditures. Volunteers had simi-lar needs to those for whom they provided careand also needed material support. In the SouthAfrican initiatives, there was a high rate of attritionamong volunteers owing to the lack of financialcompensation and the high stress levels.

A further gendered dynamic in home-basedvolunteer care of people with AIDS was revealedin a UNIFEM initiative in Botswana, Mozambiqueand Zimbabwe. The great majority of volunteercare-givers were women. Women have higherAIDS prevalence rates than men in this region,but the disproportionate numbers of womenreceiving care was higher than the sex-preva-lence AIDS rates would suggest. This could bebecause when men become ill, female familymembers take care of them. In contrast, whenwomen become ill, it is most often volunteers,mostly women, from outside the kin group thatare called on (Budlender 2003).

Both gender and class need to be inscribedinto the analysis of ‘volunteer work’ and ‘com-munity care’. A community is not a formal entity:a group of people sharing geographical space,as the term is generally used, may or may nothave the necessary structure, or the materialresources, required to undertake ‘communitycare’ in a way that does not make furtherdemands on already scarce time. Calls for volun-teer and community care work also conceal theserious emotional and psychological stressexperienced by volunteers, and the hard physicalwork involved in trying to provide competentcare in the presence of chronic diarrhoea and aninsufficient water supply. Throughout the world,the promotion of unsupported home-based careby women not only impedes greater genderequality (Akintola 2004), but also impacts onpoverty, especially where women are pulled outof production to take care of the ill and dying.

In Lesotho, for example, a joint ILO-UNIFEMdelegation to review the link between employ-ment and unpaid care in the context of HIV/AIDSfound that absenteeism among garment factoryworkers – most of whom are women – is rising

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dramatically (UNIFEM 2002a). One factory man-ager reported that out of 6,500 workers (virtuallyall women), each month, nearly half visit the fac-tory health clinic. Absenteeism is due not only toworker illness, but also to care for family or com-munity members. It is costly not only for factoriesbut also for their workers, whose pay is deduct-ed for each day lost. At the same time, employ-ers are beginning to cut back on benefits toworkers affected by HIV/AIDS, arguing that thesecosts have become untenable. A manager of afactory with 5,000 workers used to provide freetransport to funerals of employees or familymembers when there was only about one funeralper month, but stopped when these increased toabout one a week (ibid.).

Chains of paid and unpaid care Appreciation of the linkages between formal andinformal productive work has been enhanced bythe application of value chain analysis to local orinternational chains of production and distribu-tion. Work in paid and unpaid care can be viewedthrough this same value chain lens. Care worktakes place on a continuum, from a full-time paidnurse with a secure employment contract to apart-time and probably low-paid formal or infor-mal worker, to unpaid work by a family memberor neighbour, or as part of a voluntary scheme.Through this lens we can see the links betweenformal and informal work, and between paid andunpaid work, as well as the changing spatialboundaries of care-giving – between the healthfacility and the home.

Chains of care in the global south: a doctor in South Africa A doctor brought up a family of five children, thenreturned to pursue her professional career in apublic hospital for some 30 years before retiring.Through her civil service job, she had medicalinsurance and a pension, which added to herwidow’s pension enabled her to live independent-ly until she had a stroke.

While medical insurance provided short-term residential health care, after her stroke sherequired full-time care at home. She contracted aprivate nursing service, owned by two profes-sional nurses who had left government to be theirown bosses. The agency hired two assistants tocare for the client on a rotating basis. Both werepaid only when they worked and received nosocial benefits. Both had sick family members,for whom they had to make private care arrange-ments while they were on duty. One gave hercousin a month’s rent-free accommodation inexchange for two weeks care each month for herailing husband. The other paid a neighbour tocome in occasionally to care for her son who wasin advanced stages of AIDS but had been dis-charged from hospital in line with the new healthpolicy of encouraging home-based care.

While the contracting firm was responsiblefor the formal management of the client-assistantpart of this chain of care, the supervision wasinadequate for the kind of support the assistantsneeded in developing a relationship with theincreasingly demanding client. The client’sdaughter was the informal manager of the chain,

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Carpet sellers at a street market, Kosovo. Photo: Hans Madej/Bilderberg/Aurora

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a role made possible by her own well-paid, part-time and flexible employment. She in turnemployed a part-time domestic worker.

What can be learned from this case? First, thefinancing of this chain of care was anchored in thefull-time secure work of the client and her husbandwho had over a lifetime built up a contributorymedical insurance and pensions plan. Second,and by contrast, the nursing assistants were sub-contracted wage workers, working on terms thatwere precarious and insecure – in common withmany workers in the informal economy. Althoughthey had contracts, they did not qualify for work-related benefits such as paid holidays or sickleave. Work was their only source of income.

Third, the assistants had to make arrange-ments to cover their own unpaid care-givingresponsibilities at home. Either they paid for suchhelp, at a direct cost to themselves, or they reliedon another woman’s unpaid or very low paid caretime. Fourth, in the South African context fromwhich this case is drawn, sub-contracted assis-tants get limited work-related benefits, but theywill become eligible for the means-tested old agepension when they turn 60. This monthly non-con-tributory cash transfer will go some way to meet-ing their material needs. They also have access toa limited range of free health services. This is quitedifferent to the situation of people in most devel-oping countries, where there is little state supportfor the retirement years and fees are charged forstate health services.

These cases show the links between differenttypes of work, and how the costs of paid work areobscured by the failure to value the unpaid workon which it depends. They also show why manyforms of work do not by themselves provide apathway out of poverty. Women are expected toreconcile paid and unpaid work, receiving littlestate support, with the result that the kinds of paidwork that they most often find themselves in areprecisely those that fail to enable them to escapefrom poverty. The concepts of ‘volunteer work’and ‘community care’ conceal the real costsinvolved in care work as well as the gender biasthat ensures that it is women who perform it.

Gender and Other Sources ofDisadvantage: Implications for PovertyReductionIn every economic system, women face con-straints in the realm of paid work by reason of theirgender. As detailed in this chapter, women facegreater demands on their time, notably for unpaidcare work and domestic chores, than men. Childrearing and other forms of unpaid care workalways interrupt women’s work more than they domen’s work. Furthermore, women’s access toproperty is typically less than that of men and oftenmediated through their relationship to men; andwomen face greater social constraints than men on

their physical mobility. Perhaps not surprisingly,unpaid work in the family enterprise is also consis-tently done by women more than by men.

However, understanding the links betweenwomen’s employment and their poverty statusrequires integrating an analysis of gender with thatof other relationships. Class, religion, race/ethnic-ity and space intersect with gender to positionmany women in precarious forms of work. Wealthis frequently distributed along ethnic and raciallines. In many Latin American countries, forinstance, indigenous communities and communi-ties of African descent have the lowest levels ofeducation, are concentrated in precarious andpoorly remunerated work and are the most impov-erished (Heyzer 2002; ILO 2004a). Women in thesecommunities are doubly disadvantaged by reasonof their gender and of their wider social identity.

In India, on the other hand, religion, caste andethnic identity all play a role in what work peopledo. Among Hindus, many individuals and families–particularly those from artisan and service castes- continue in hereditary caste occupations eventoday. If and when individuals leave the hereditaryoccupation, their caste also determines what kindof alternative work they can take up. Gendernorms impose limits on women’s physical mobili-ty and what work they can do. Both high-casteHindus, particularly in North India, and Muslimspractice purdah (the veiling and/or seclusion ofwomen) which imposes restrictions on women’sphysical and work mobility. If and when thesewomen work for pay, they are likely to do so fromtheir homes—with the result that a large share ofall women workers in India are home-based (Chen2000; Unni and Rani 2005).

The inadequacy of ‘gender’ alone to explainwomen’s poverty and lack of empowerment isalso illustrated by the phenomenon of paiddomestic work. Millions of domestic workersworldwide, most of whom are women, areemployed by other women or have their chiefinteraction at work with their male employer’s wife.Typically this is a ‘master-servant’ relationship,with the class difference often coinciding with dif-ferences in ethnicity and language betweenemployer and employee.

The relationship between (woman) employerand (woman) domestic worker is complex. Aswomen, they have shared interests in, for exam-ple, child development and education. Where thewoman employer works, her career prospects arecontingent on the (typically poorly paid) work ofthe domestic worker. The day-to-day security ofthe employer’s children depends on the employee,who has to be away from her own children to dothis work. The subordinate domestic worker haslittle autonomy or voice, but may receive somemeasures of assistance such as with health costs,children’s school fees or the handing on of sec-ond-hand clothes. However, these are not con-

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tractual obligations, cannot be anticipated orplanned for and depend on the whim of theemployer.

The subordination in class terms is very oftenreflected in and compounded by a racial or ethnicdimension. In South Africa, most white families,even poor ones, employ live-in African or coloureddomestic workers, though over the last threedecades or so there has been a trend towardspart-time domestic work. The employment ofdomestic workers by African, Indian and colouredelites is also widespread. Given urban housingshortages, the boundary between paid and unpaiddomestic work is often blurred, with labour doneby extended family members in exchange forboard and lodging.

Patterns of international migration also showhow gender intersects with class, with demo-graphic trends and with changes in the demandand supply side of the labour market betweenwomen in developed and developing countries,and between men and women. In the last twodecades women have made up an increasing pro-portion of all migrants to more affluent countries. Itis generally noted that some economic migrants,both within and across borders, are not the poor-est of the poor. Many come from upwardly mobilefamilies, or use migration in a step to upwardmobility. Relative to the status of women in thesending country, women migrants may be betteroff. But relative to women in the receiving country,they are likely to be much worse off, and they maytake employment requiring a much lower level ofskill than they possess.3

Chile’s economic growth in the 1990s provid-ed domestic work opportunities in the capital city,Santiago, for Peruvian women displaced byunemployment resulting from economic restruc-turing. Traditionally, domestic work for Santiago’smiddle class had been supplied by young Chileanwomen from rural areas. Improvements in thelabour law with regard to domestic work, howev-er, led to greater awareness of their rights amongChilean domestic workers, who became betterable to defend these rights despite their dispersedworkplaces. Many Chileans now favour employingPeruvian women (who are often better educatedthan the rural women they are displacing).Although they generally pay the same wages toboth native and migrant workers, employersfavour the Peruvians because their precariouspolitical and legal circumstances make them lesslikely to protest the traditional master-servant rela-tionship (Maher and Staab 2005).

In health work, too, a global shortage oflabour in health care has led to changing globalpatterns of mobility (Flyn and Kofman 2004). In

developed countries, as wages for nursing havenot kept pace with inflation, fewer people areentering the field, and the existing nursing popu-lation is ageing. The demand is being met bywomen migrants from developing countries aswell as from developed countries such asAustralia and New Zealand. A number of north-ern countries run aggressive recruiting cam-paigns, and find a ready response in countrieswhere working conditions and pay structures inthe health services are poor, and where migrationoffers the chance of career mobility. In Ghana, forexample, the number of nurses who left thecountry in 2000 to work in developed countrieswas twice the number of new nurses who gradu-ated from nursing programmes within the coun-try; in the United Kingdom, between 2001 and2002, more nurses from overseas than nationalswere added to the nursing register (Buchan andSochalski 2004). AIDS gives an added impetus tothe migration of health professionals, when workin the health services in their own countriesbecomes intolerable.

This migration from poorer to richer coun-tries provides opportunities to individual women,and remittances sent home assist their families.Remittances also contribute to domestic savingsin their home countries. In global terms, howev-er, the migration of skilled personnel represents asignificant subsidization of developed countriesby developing countries, as the latter carry thecosts of expensive education and training. It alsoleaves behind a deficit in health personnel, whichin turn feeds the development of a two-tierhealthcare system in developing countries – agood private system for the rich and a poor pub-lic one for the poor – as well as, more generally,the erosion of whatever health service there is.This has a direct impact on the unpaid care workof women.

For the society as a whole, this migrationmay contribute to class differentiation. It mayopen up employment opportunities for somewomen in the sending countries in low paiddomestic or care work in the migrants’ homes;on the other hand, it may simply add to the work-load of the existing unpaid care workers and vol-unteers. From the perspective of the migratinghealth worker, migration raises the question ofwho looks after her family in her absence. Skilledhealth professionals in the North, whether nativeor migrant, employ domestic and care workers,some of whom may be migrants, at wages lowrelative to their own, to see to their householdand personal domestic needs.

Although gender is only one source of dis-advantage faced by women, it is important to

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3 See Kofman 2004 on stratification in women’s global migration patterns; Esim and Smith 2004 on Asian domestic workers whomigrate to the Arab States; Zambrano and Basante 2005 on Ecuadorian domestic workers in Spain and Italy; Constable 1997 forFilipina domestic workers in Hong Kong.

underscore the fact that in virtually all countriesand traditions of the world women bear the pri-mary responsibility for providing care (Nussbaum2005), which poses constraints on the kind ofemployment they can take up. This, in turn, hasdirect implications not only for their own eco-nomic security but also for the economic securi-ty of the next generation. The case of Lucy andJack illustrated the impact on the future of chil-dren when a mother has to shift from full-time topart-time work. The Lesotho case showed howthe low incomes and working conditions ofmothers reduced the time they spent on breast-feeding and left them dependent on untrainedcare-givers; their long hours and rigid work regu-lations reduced their ability to tend to the healthand other care needs of their children, and theylost wages if they sought health care for them-selves. The forced neglect of children in their ear-liest years has life-long repercussions and can-not be remedied in later years. The reliance onwomen’s unpaid care work to provide socialservices contributes directly to the cross-genera-tional transmission of poverty.

In sum, under free market policies the state’srole, in both developed and developing coun-tries, has served to extend both the power andsecurity of capital, while working against supportfor women’s unpaid care work. There are hiddencosts of transferring service provision towomen’s unpaid work, including stagnant pro-ductivity, the deskilling of the workforce and thetransmission of poverty to the next generation.The policies that combine to increase thedemands on women’s paid and unpaid timesimultaneously limit women’s ability to secure adecent livelihood and to engage in wider strug-gles to gain economic and social security.

Professional women’s mobility is oftendependent on the role of a subordinate woman pro-viding both household and care work. And thecombination of ageing populations and smallerfamilies suggests that the demand for unpaid care

work and domestic work will increase (Benería2003). Women will shift to part-time work in order tosolve a present problem of, say, care of an older rel-ative. This will lower current income and have per-manent long-term impacts on the financial securityof the whole family.

In developing countries, more calls for vol-unteer work can be expected, to compensate forscarce state health and welfare services andexpressive private services. HIV/AIDS has great-ly increased the demand for unpaid care workand volunteer work. It has also shifted inter-gen-erational responsibilities: when those in the adultgeneration get ill or die, older people as well asyounger children have to work if households areto survive. It is important to look at volunteerwork from the perspective of the care-giver andto recognized the gendered aspects of ‘commu-nity’, especially when it is used in calls for volun-tary work in community-based care pro-grammes. And it critical to explore ways ofencouraging men to increase their participationin unpaid care work.

Not only does women’s responsibility forunpaid care work help determine where they aresituated in the labour market, but genderednotions of ‘women’s work’ and ‘men’s work’ helpshape the structure of the labour market. AsChapters 3 and 4 will show, the segmentation oflabour markets by gender and the gender gaps inearnings and benefits across and within thesesegments contribute to the relative poverty anddisadvantage of women compared to men,regardless of class, religion or ethnicity. Most ofthe world’s working poor, especially women, areconcentrated in informal employment, and formost, the benefits are not sufficient and the coststoo high to enable them to have an adequatestandard of living over their working lives. To besuccessful, therefore, efforts to eliminate povertymust break the link between women’s location inthe global labour force and their disproportionateexposure to poverty and insecurity.

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3 Employment, Gender and Poverty

Goat herder, Rajasthanstate, India.

Photo: Martha Chen

Over the past three decades, there hasbeen a marked increase in women’sshare of employment in both devel-oped and developing countries – atrend often referred to as the feminiza-

tion of the labour force. Simultaneously, there hasalso been an increase in certain types of informaland non-standard employment that have highdegrees of insecurity – often referred to as theinformalization of the labour force. This has givenrise to the idea that the trends are inter-linked.However, while no one disputes that women areentering the labour force in growing numbers,there is ongoing debate about the processesunderlying this phenomenon. Are women enteringjobs that were previously occupied by men, or aresome forms of work being converted into the typeof arrangements traditionally associated withwomen? Or both?

Feminist scholars question the suggestion ofany causal link between these two trends. Theypoint out that shifts in social reproduction, notjust in labour markets, contribute to the coinci-dence of feminization and informalization. Somehave also noted that informalization affects bothwomen and men: that there is a general insecuri-ty in the labour market and that this insecurity isoften shaped not only by gender but by ethnicity,religion, age and migration status (see, e.g.,Standing 1989, 1999; Armstrong 1996; Bakker1996; Vosko 2002, 2003).

A parallel observation is that the burden ofpoverty borne by women, especially in develop-ing countries, is different from that of men, a phe-nomenon often referred to as the feminization ofpoverty. During the UN Decade for Women (1975-1985) researchers and advocates drew attentionto the disadvantaged position of women eco-nomically and socially, especially those in female-headed households, and called for a gender per-spective in the whole field of poverty research.

Since the basic unit of poverty analysis is thehousehold, not the individual, the only straightfor-ward way to analyse gender and poverty is tocompare the poverty levels of female-headed and

male-headed households (Kabeer 1996; Burn2004). Recently, the idea that the social and eco-nomic inequalities that women experience canautomatically be associated with female-headedhouseholds has come into question (see e.g.,Chant 2003). However, the idea of the feminiza-tion of poverty has been a powerful advocacy toolfor women’s rights advocates, expressing as itdoes an observed reality in many places. Thismakes it particularly important to improve themeasurements. Several recent frameworks havebeen advanced to improve the understanding ofpoverty from a gender perspective that alsoattends to social relations of race, migration sta-tus and disability (Chant 2003; UNIFEM 2005b;Vosko et al. 2003). Collectively these frameworkssuggest that a multi-dimensional approach is crit-ical to assessing issues of gender and poverty.

Women’s share of the labour force hasincreased in almost all regions of the world. By1997, women comprised over 40 per cent of thelabour force in Eastern and South-Eastern Asia,sub-Saharan Africa, the Caribbean and the devel-oped regions, approaching that of men (UN2000:110). The largest increase occurred in LatinAmerica, where women constituted little morethan a quarter of the labour force in 1980 butmade up a third of the labour force in CentralAmerica and nearly two fifths in South America by1997. From 1980 to 1997 the proportion ofwomen in the labour force also grew in WesternEurope and the other developed regions butremained the same in Eastern Europe. Morerecent data show that women’s share of thelabour force has generally continued to increase.1

However, women still represent a third or less ofthe labour force in Northern Africa, Western Asia,Southern Asia and Central America, and recentdata available for four countries of Northern Africashow that women’s share of the labour force inthis region may be decreasing.

With the growth in women’s employment,attention has turned to the quality of their employ-ment: the types of jobs, earnings and benefits. Thisconcern is especially relevant now as global eco-

“Statistics have power…. When statistics are in thehands of activists, then struggles are strengthened.”

Ela Bhatt, founder of SEWA

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1 The most recent data are based on the United Nations Statistics Division, “Statistics and indicators on women and men,” table 5d.http://unstats.un.org/unsd/demographic/products/indwm/ww2003. Given the small number of countries with data in some regions,they are interpreted here with caution.

nomic trends are changing the nature of employ-ment opportunities for women and men every-where (see Chapter 4). In developing and transitioncountries particularly, the segmentation of labourmarkets for women and men and the impact thishas on earnings, benefits and poverty status needto be examined more closely. A recent study of thechanging economic well-being of women and menin the transition countries of Eastern and CentralEurope and the Commonwealth of IndependentStates (CIS) looks at a wide range of data relatedto labour force participation, earnings and socialprotection to provide new insights on the impact ofthe political, economic and social changes occur-ring in these countries (see Box 3.1).

This chapter presents new ways of conceptu-alizing and measuring the feminization of the labourforce, the informalization of the labour force and thefeminization of poverty – and the links among them.Following a look at the recently expanded definitionof informal employment, which focuses on theterms and conditions of work in addition to thecharacteristics of enterprises, it presents the rec-ommended employment indicator for MDG Goal 3.The bulk of the chapter then presents new datafrom statistical analyses commissioned for thisreport in seven countries on segmentation of thelabour force and average earnings and poverty riskacross the different employment segments. These

findings show both the feasibility of this type of sta-tistical analysis and the importance of such findingsfor understanding the links between employment,gender and poverty

Informal Employment: Definition andRecent DataInformal employment and the related concept ofthe informal sector are relatively new concepts inlabour force statistics. In 1993 the InternationalConference of Labour Statisticians (ICLS) adoptedan international statistical definition of the ‘infor-mal sector’ to refer to employment and produc-tion that takes place in small and/or unregisteredenterprises. In 2003 the ICLS broadened the defi-nition to include certain types of informal wageemployment outside informal enterprises: this larg-er concept is referred to as informal employment.

So defined, informal employment is a largeand heterogeneous category. For purposes ofanalysis and policy-making it is useful to divide for-mal and informal employment into more homoge-neous sub-sectors according to status in employ-ment, as follows:2

Informal self-employment including:� employers in informal enterprises;� own account workers in informal enterprises;� unpaid family workers (in informal and formal

enterprises);

2 Status in employment is used to delineate two key aspects of labour contractual arrangements: the allocation of authority over thework process and the outcome of the work done; and the allocation of economic risks involved (ILO 2002a).

The Story Behind the Numbers: Women and Employment in Central andEastern Europe and the Commonwealth of Independent States*

What is the impact of the collapse of state socialism on women’s labour market position? Two major reports examined this question and arrived at differentconclusions – even while using similar data. The World Bank’s Gender in Transition found “no empirical evidence that the treatment of women in the labourmarket has systematically deteriorated across the region” (World Bank 2003: xi). By contrast, a report prepared for the European Foundation for theImprovement of Living and Working Conditions concluded that “…women’s advanced gender-equality legacy in the international ranking order has beenseriously damaged, leaving only vestiges, such as high education, and female presence in many professions” (Pollert and Fodor 2005:62).

A UNIFEM analysis of harmonized data for 19 countries in Central and Eastern Europe and the CIS region from the Gender Statistics Database of theUnited Nations Economic Commission for Europe showed that these different evaluations of women’s situation in great part reflect a difference in the ques-tions asked. The World Bank report focused on women’s labour force position relative to men’s. The labour market position of the majority of women haddeclined but so had that of many men; therefore women’s relative disadvantage barely grew. Further, the standard indicators of gender inequality in work –the wage gap or relative levels of horizontal job segregation – had not deteriorated.

The second comparison focused on the trends for women over time. Here the UNIFEM analysis showed that millions of women lost their jobs, and eitherbecame unemployed or dropped out of the labour market altogether. Already high levels of job segregation have remained stable and women are still beingcrowded into less prestigious, underpaid and public service jobs. Only a handful of women could take advantage of the new opportunities offered by interna-tional companies or domestic private sector firms. Poverty rates increased greatly as the scope and real value of social protection and services declined simul-taneously with the disappearance of jobs. Overt discrimination increased, especially towards older women, women with young children and Roma women.

The UNIFEM study also showed the importance of exploring the social and cultural contexts behind the typical indicators of gender equality. For example,a 20 per cent wage gap between women and men is more tolerable in a centrally planned, state socialist economy when income differences are small andpeople can make ends meet on average wages, especially as these are supplemented by a relatively large number of benefits in kind (such as housing subsi-dies, subsidies on certain food stuff, etc.). Today a wage gap of a similar size may mean the difference between economic self-sufficiency and dependence.

The findings of this UNIFEM study are supported by recent ILO research in the Czech Republic, Hungary and Poland (Fultz et al. 2003). In these coun-tries the transition has brought greater losses of social protection to women as compared to men. In particular, in two of the three countries large cuts infamily benefits left working parents, mostly women, with considerably less support for efforts to balance family and professional responsibilities.

* Based on UNIFEM 2005a.

Box 3.1Box 3.1

� members of informal producers’ cooperatives(where these exist).3

Informal wage employment: employees without for-mal contracts, worker benefits or social protectionemployed by formal or informal enterprises or aspaid domestic workers by households. Dependingon the scope of labour regulations and the extent towhich they are enforced and complied with, infor-mal jobs can exist in almost any type of wageemployment. However, certain types of wage workare more likely than others to be informal. Theseinclude:

� employees of informal enterprises;� casual or day labourers;� temporary or part-time workers;� paid domestic workers; � unregistered or undeclared workers;� industrial outworkers (also called homeworkers).

Informal employment is particularly importantin developing countries, where it comprises onehalf to three quarters of non-agricultural employ-ment: specifically, 48 per cent in Northern Africa;51 per cent in Latin America; 65 per cent in Asia;and 72 per cent in sub-Saharan Africa. If SouthAfrica is excluded, the share of informal employ-ment in non-agricultural employment rises to 78per cent in sub-Saharan Africa.4 If comparable datawere available for other countries in Southern Asiain addition to India, the regional average wouldlikely be much higher. If informal employment inagriculture is included, as is done in some coun-tries, the proportion of informal employment great-ly increases: from 83 per cent of non-agriculturalemployment to 93 per cent of total employment inIndia; from 55 to 62 per cent in Mexico; and from28 to 34 per cent in South Africa.

Throughout the developing world, informalemployment is generally a larger source of employ-ment for women than formal employment and gen-erally a larger source of employment for womenthan for men. Other than in Northern Africa, where43 per cent of women workers are in informalemployment, 60 per cent or more of women work-ers in the developing world are in informal employ-ment (outside agriculture). In sub-Saharan Africa,84 per cent of women non-agricultural workers areinformally employed compared to 63 per cent ofmen; and in Latin America the figures are 58 percent of women in comparison to 48 per cent ofmen. In Asia, the proportion is 65 per cent for bothwomen and men.

Self-employment comprises a greater shareof informal employment (outside of agriculture)than does wage employment, ranging from 60 to70 per cent of informal employment, dependingon the region. In most countries for which dataare available, women (as well as men) in informal

employment are more likely to be in self-employ-ment than in wage employment (see Table 3.1). InNorthern Africa and Asia and in at least half of thecountries of sub-Saharan Africa and LatinAmerica, more women in informal employment(outside agriculture) are in self-employment thanin wage employment. By contrast informal wageemployment is more important for women inKenya, South Africa and four countries in SouthAmerica – Brazil, Chile, Columbia and Costa Rica.In these countries more than half of women ininformal employment are wage workers.Moreover, in all but one of these countries – SouthAfrica – women are more likely to be informalwage workers than are men. In explaining thesepatterns, it is important to recognize that paiddomestic work is an important category of infor-mal employment for women in all Latin Americancountries as well as in South Africa.

Millennium Development Goal 3:Recommended Employment IndicatorsAs noted in Chapter 1, the Millennium Develop-ment Goals (MDGs) have become a driving forcefor international development, setting developmentpriorities as well as time-bound targets and indica-tors for measuring progress in implementation.While employment is one of the indicators to mon-itor progress under Goal 3, both women’s rightsadvocates and statisticians have questioned thevalue of the current indicator – the share of womenin non-agricultural wage employment – as a meas-ure of women’s economic status. The MillenniumProject Task Force on Education and GenderEquality mentions two problems in particular: (i) anincrease in women’s share of paid employmentadds to women’s total workload, so that whatwomen may gain in terms of cash they lose interms of time, and (ii) the indicator measures onlythe presence or absence of work and not the qual-ity of work (Grown et al. 2003).

The indicator has additional limitations when itis used as the sole indicator to monitor changes inwomen’s economic situation. For one thing, inmany countries, especially developing countries,non-agricultural wage employment represents onlya small portion of total employment. In addition,the indicator

� is difficult to interpret unless additional informa-tion is available on the share of women in totalemployment, which would allow assessment ofwhether women are under- or over-representedin non-agricultural wage employment; and

� does not reveal that there are different types ofnon-agricultural wage employment. Some ofthem are better than others in terms of the earn-ing and/or the legal and social protection thatthey offer (Antrobus 2005; Hussmanns 2004).

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3 The guidelines also include production for own final use (i.e., subsistence production) as informal. In many countries this is not consid-ered an important category and is not included in employment statistics.

4 Data in this section from ILO 2002b.

In view of these problems, the Sub-Group onGender Indicators of the Inter-Agency and ExpertGroup (IAEG) on MDG Indicators discussed thefeasibility of a new indicator that would includeboth agricultural and non-agricultural employ-ment and distinguish between formal and infor-mal employment. An indicator that builds on thecurrent one but frames it in a more comprehen-sive way – employment by type – was proposedby the ILO (see Box 3.2). It was recommendedfor Goal 3 by the IAEG Sub-Group on GenderIndicators and by the Task Force on Educationand Gender Equality (Grown et al. 2005). Thisnew indicator provides a more complete pictureof where women are situated relative to men in amulti-segmented labour force.

The task force also recommended the addi-tion of an indicator on gender gaps in earnings inwage employment and self employment, notingthat this remains among the most persistent

forms of inequality in the labour market (Grown etal. 2005). It recognized the need for new method-ological work as well as the collection of newdata in order to generate statistics on sex differ-entials in earnings from employment, especiallyearnings from self-employment, and recom-mended that priority be given to the developmentof these data (ibid.). Ideally, data on averageearnings by sex for all categories of the employ-ment by type indicator should be developed.5

The studies commissioned for this report uti-lize the basic categories or types of employmentin the proposed employment indicator. Eachcountry case study tabulates data in terms of for-mal and informal employment, agricultural andnon-agricultural employment, wage and self-employment and related employment status cat-egories and by sex. Data for earnings are pre-sented for each of the categories. Taken overall,the case studies provide a test for the feasibility

Wage and Self Employment in Non-agricultural Informal Employment by Sex, 1994/2000

Self-employment as a percentage of Wage employment as a percentage ofnon-agricultural informal employment non-agricultural informal employment

Country/Region Total Women Men Total Women Men

Northern Africa 62 72 60 38 28 40Algeria 67 81 64 33 19 36Egypt 50 67 47 50 33 53Morocco 81 89 78 19 11 22Tunisia 52 51 52 48 49 48Sub-Saharan Africa 70 71 70 30 29 30Benin 95 98 91 5 2 9Chad 93 99 86 7 1 14Guinea 95 98 94 5 2 6Kenya 42 33 56 58 67 44South Africa 25 27 23 75 73 77Latin America 60 58 61 40 42 39Bolivia 81 91 71 19 9 29Brazil 41 32 50 59 68 50Chile 52 39 64 48 61 36Colombia 38 36 40 62 64 60Costa Rica 55 49 59 45 51 41Dominican Rep. 74 63 80 26 37 20El Salvador 65 71 57 35 29 43Guatemala 60 65 55 40 35 45Honduras 72 77 65 28 23 35Mexico 54 53 54 46 47 46Venezuela 69 66 70 31 34 30Asia 59 63 55 41 37 45India 52 57 51 48 43 49Indonesia 63 70 59 37 30 41Philippines 48 63 36 52 37 64Syria 65 57 67 35 43 33Thailand 66 68 64 34 32 36

Source: ILO 2002b. Data prepared by Jacques Charmes from official national statistics.

5 A basis for such work would be the factors that determine discrimination in earnings, including not just wage data but also jobsegregation, social valuation of skills and other issues (see ILO 2003c: 44-47).

Table 3.1Table 3.1

41

and desirability of the recommended employmentby type and earnings indicators for Goal 3.

While improving women’s opportunities inthe labour market and earnings are central to theeradication of poverty, Goal 1 to reduce povertyand hunger was not framed in terms of eitheremployment or gender. However, the Task Forceon Education and Gender Equality concludedthat unless improving women’s earnings is seenas central to increasing the incomes of poorhouseholds, it will be difficult to meet this goal.

Households receive income from a variety ofsources – employment, remittances, transfersfrom government or other households and, insome cases, rents and profits. Poor householdsare likely to depend more on earned income thanon other types of income. Although poverty is mul-tifaceted (see Chapters 1 and 4), income remainsa crucial factor influencing how poverty is experi-enced and how poor families are able to cope.Therefore, access to employment and the qualityof the opportunities available matter a great deal indetermining who is poor and who is not.

The links between working in the informaleconomy, being a man or women and being poorcan be formulated as a series of questions. Arethose who work in the informal economy poorerthan those who work in the formal economy? Arefemale informal workers poorer than male infor-mal workers? What are the differences in earn-ings and poverty status among women and menworkers in the various types of employment thatmake up the informal economy, and how do

these compare with workers in similar types ofwork in the formal economy where they exist?

Unfortunately, data have not been readilyavailable to answer these questions. Whileincreasing numbers of countries are collectingdata on employment in the informal sector and afew countries are collecting data even on thebroader concept of informal employment, thistopic is not yet a well-established part of nation-al programmes of data collection and tabulation.Official data from national surveys still do notpermit extensive comparisons of employment interms of formal and informal employment, statusin employment within each, the distribution ofwomen and men workers across these cate-gories or the wages or poverty status associatedwith them.

However, in some of the countries that havecollected the required data, researchers havebegun to do the kind of statistical analysis thatanswers these questions. Building on theseefforts, UNIFEM commissioned research for thisreport in seven countries to look more closely atlabour force segmentation by employment sta-tus, earnings and poverty. A common tabulationframework was developed and analysis was car-ried out in five developing countries: Costa Rica,Egypt, El Salvador, Ghana and South Africa. Asimilar study was prepared for India based oncity-specific data and an earlier national study.The framework was also used to examine thelinks between employment, earnings and pover-ty in one developed country: Canada.

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Proposed Indicator on Employment (Goal 3):Share of Women in Employment by Type

EMPLOYMENT BY TYPE WOMEN AS % OF EMPLOYED PERSONS (BOTH SEXES)

Total employment (all types) X1. Agricultural employment (1) X2. Non-agricultural wage employment (2) X

of which 2.1: Informal wage employment (3) X3. Non-agricultural self-employment (4) X

of which 3.1: Informal self-employment (5) X

(1) No further subdivision, as most agricultural employment is self-employment and informal.(2) Current MDG indicator.(3) Employees holding informal jobs in formal sector enterprises, informal sector enterprises or as paid domes-

tic workers employed by households. Direct measurement (LFS data) or use of residual method.(4) Own-account workers, employers, contributing family workers and, where relevant, members of pro-

ducers’ cooperatives.(5) Contributing family workers and informal sector entrepreneurs, including members of informal pro-

ducers’ cooperatives. When data on informal sector entrepreneurs are not available, missing datamay be estimated by using the share of informal sector entrepreneurs in total non-agricultural self-employment (own-account workers, employers, members of producers’ cooperatives) of countries inthe same region or sub-region.

Box 3.2

Labour Force Segmentation, Earnings,and Poverty: Developed Country DataIn developed countries, many women and menwork in forms of employment and arrangementsthat differ from the full-time, full year job with ben-efits and with labour and social protections(Cranford and Vosko 2005; Pocock et al. 2004;Fudge and Vosko 2001; Carré et al. 2001). Suchnon-standard forms of employment are significantand even growing in many of the countries,although comprehensive data are not availablebecause of differing definitions and the fact thatfew countries collect data on all categories(Campbell and Burgess 2001; Vosko 2005). Forinstance, there is very limited data on inter-firmcontracting, a new form of non-standard employ-ment that is emerging in the fast growing sectorsthat provide labour-intensive services to otherbusinesses or public institutions (e.g., janitorialservices).

Forms of employment commonly classified asnon-standard work – namely, part-time and tem-porary wage employment and own account self-employment – are a more important source ofemployment for women than for men in developedcountries. This is shown in comparing both thenumbers of women and men employed and non-standard employment as a proportion of totalwomen’s and total men’s employment:

� There are generally more women than men inpart-time employment (both wage and self-employment) and temporary jobs. In 28 devel-oped countries (including all OECD countries) inthe 1990s, women comprised the majority ofpart-time workers (Carré and Herranz 2002).Women’s share of part-time employment rangedfrom 60 per cent in Turkey to 97 per cent inSweden.

� In many European countries the majority ofworkers in temporary employment are women.In nine of fifteen European Union (EU) countries,women account for about half or more of tem-porary employed workers, and a solid majority insix of these (ibid.): Sweden (59%), Ireland (58%),Belgium (57%), United Kingdom (55%),Netherlands (54%) and Denmark (52%). EUcountries where women are the minority of tem-porary employees are Spain (38%), Austria(43%), Greece (44%), and Germany (45%).

� In Australia, Canada and the United States in2000, there were more women than men in sev-eral forms of non-standard employment that areparticularly precarious, including own-accountself-employment, temporary employment andpart-time permanent employment (Vosko 2004).

Thus in each of the three countries a higher pro-portion of the female workforce (about 30-50%)than the male workforce (about 20-35%) isengaged in forms of employment differing fromthe norm of the full-time permanent job (ibid.).

For women, the so-called flexibility associatedwith non-standard work is often cast in positiveterms, allowing them to combine paid work withunpaid care responsibilities. Chapter 2 considersthe impact of unpaid care work on paid work, par-ticularly informal paid work, and Chapter 4 looks atthe costs and benefits of informal work more gen-erally. The example below looks more closely at theprecariousness associated with non-standard jobsin developed countries that are subject to aprocess of informalization and, therefore, resembleinformal wage work in developing countries.6

Temporary employment as precariousemployment: the example of CanadaTemporary jobs – including fixed term/contract,casual, seasonal and on-call work as well as workthrough a temporary agency – have been one ofthe driving forces behind the growth of non-stan-dard employment since the 1990s in Canada.Wages and household income of persons in tem-porary and permanent jobs were compared usingStatistics Canada’s 2002 Survey of Labour andIncome Dynamics. Results are summarized below:

Numbers working as temporary/perma-nent employees: Temporary jobs in Canada grewfrom 7 to 10 per cent of employment from the early1990s to 2002 and now represent the major formof non-standard work. In 2002, more women thanmen were employed in temporary work: 1.14 mil-lion women compared to 1.09 million men.Temporary jobs are slightly more important as asource of employment for women (18%) than formen (16%) To capture ethic/racial identity, statisti-cal surveys in Canada ask all respondents to iden-tify themselves as “visible-minority” or “nonvisible-minority.” 7 Among women, visible minorities aremore likely to be employed in temporary jobs(21%) than non-visible minorities (18%). Butamong men visible minorities are only slightly lesslikely to work in temporary jobs (15 % vs.17%).

Hourly wages: As expected, hourly wagesare lower for temporary than for permanent work-ers and for women than for men. Differences inhourly wages (both mean and median) betweentemporary and permanent employees are greaterfor men (ranging from $6.00 to $7.00 Cdn) than forwomen ($3.00 to $4.00 Cdn). A similar patternappears when wages are viewed in terms of edu-cation: wage differences between permanent and

42

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ress

of t

he W

orld

’s W

omen20

05

6 The data analysis for Canada was done by Sylvia Fuller and Leah F. Vosko, York University, Toronto.7 The Employment Equity Act mandates the application of equity measures to visible minorities, people with disabilities, aboriginal

people and women. It defines visible minorities as persons other than aboriginal people, who are non-caucasian in race or non-white in colour.

43

temporary jobs are generally higher among moreeducated workers. The contrast in earningsbetween temporary and permanent workers isgreater among men than among women at all edu-cational levels. Additional factors that affect earn-ings comparisons include the fact that youngerworkers, whose wages are always lower thanthose of older workers, are more likely than olderworkers to have temporary jobs; the occupationalstructure of temporary jobs differs from permanentjobs; and the percentage of part-time work tendsto be higher for temporary jobs than for permanent.

Low annual earnings: Almost 80 per cent ofwomen and 65 per cent of men in temporary workhave low overall annual earnings (less than$20,000 Cdn/yr) compared to 39 per cent ofwomen and 19 per cent of men in permanent jobs.There is little difference between visible minorityand non-visible minority women workers in theirincidence of low annual earnings, but male visibleminority temporary workers fare worse than theirnon-visible counterparts (75% to 63%). Still theincidence of low annual earnings for visible minor-ity men in temporary jobs is slightly lower than forvisible minority women (75% in contrast to 80%).

Multi-variate model: The earnings penaltyassociated with temporary employment was test-ed by controlling for individual demographic vari-ables (age, immigrant status, household demo-graphic, race, education and years of work experi-ence) and for job characteristics (occupation,industry, part-time, firm size, industry and union-ization). Even after accounting for these differencesbetween temporary and permanent workers, thereremained a substantial and statically significantwage penalty associated with temporary employ-ment for both women and men. When controllingfor individual demographic variables, women intemporary jobs earn 8 per cent lower hourly wagesand men earn 11 per cent lower hourly wages thantheir permanent counterparts. In other words, theearnings penalty is higher for men than for women.When controlling for job characteristics, the penal-ty for temporary employment increases somewhatto 9 per cent for women and 12 per cent for men,although the difference in women’s and men’scoefficients is no longer statistically significant.

Low household income: Canada’s LowIncome Cutoff is defined as levels at which familiesor unattached individuals spend 20 per cent morethan average on food, shelter and clothing.Although low household income is not a directmeasure of wages and earnings penalties relatedto temporary work, it helps illustrate the degree towhich the household characteristics of temporaryworkers offset their wage and earnings disadvan-tage and the extent to which the country’s tax andincome transfer system also has an effect. Thesedata show that temporary workers have a higherincidence of low household income after taxesthan permanent workers: 9 per cent of temporary

male workers and 10 per cent of temporary femaleworkers have low household incomes compared to3 per cent of permanently employed men and 4 percent of permanently employed women. Visibleminority temporary workers have a higher inci-dence of low household income. The differencesbetween women and men are not great, but visibleminority women in temporary jobs have the highestincidence of living in low-income households (18%of women versus 16% of men.)

Summary: earnings penalty of temporary jobs The analysis shows that there is a clear earningsdisadvantage to persons who work in temporaryjobs. While most persons in temporary jobs havelow earnings, the proportion of women with lowannual earnings is much higher than for men:almost 80 per cent of women in comparison to 65per cent of men. When viewed in terms of house-hold income, to some degree household charac-teristics and the country’s tax and income transferpolicies offset the earnings disadvantage of tem-porary work because fewer women than men livedin households with low earnings. However, visibleminorities employed in temporary jobs have ahigher incidence of living in low-income house-holds.

The analysis also shows that the earningspenalty for working in temporary jobs is greater formen than for women. Underlying this pattern is thegeneral segmentation of the labour force by sex.Because more men (than women) are employed inhigh-earning permanent jobs, there is a greatercontrast for men in lower-earning temporary work.Furthermore, temporary work itself is stratified bygender. The forms of temporary employment thatare highly precarious – temporary agency work andcasual work – are generally those in which womenpredominate.

Labour Market Segmentation,Earnings and Poverty: New Data fromDeveloping Countries The developing countries selected for this pilotresearch are diverse in size, geographical location,demographic history and culture (see Box 3.3). In allof the countries, informal employment is widespread.

Each of the country case studies was basedon national data sets that offered the possibilityof identifying workers according to the mainemployment status categories – formal and infor-mal, and agricultural and non-agricultural. Thedistinction between informal and formal self-employment, including employers and own-account workers, was based on whether anenterprise was registered with a governmentagency and/or its size. In line with the definitionadopted by the 17th ICLS, social protection crite-ria were primary in distinguishing formal frominformal wage employment – specifically the

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existence of social security contributions, paidleave and/or employer contributions to a pen-sion. Wage employment without at least onesuch social protection was considered to beinformal. This may differ from the definition usedby countries’ official statistical agencies. Forexample, official estimates of informal employ-ment in South Africa reflect employment in non-registered business enterprises (with or withoutsocial protection), with domestic and agriculturalworkers enumerated separately. Details on clas-sification scheme for each country are includedin table notes at the end of the chapter.

Segmentation of the informal workforceLabour markets in developing countries have, inthe past, been characterized as dualistic. A duallabour market is thought to include (i) a formal, reg-ulated segment in which there are few high-qualityjobs, and (ii) a large, unregulated segment in whichworkers excluded from formal jobs are employed.

However, analysts are beginning to recog-nize that a dual labour market model is notsufficient to capture the increasingly multi-faceted employment dynamics in develop-ing economies. Moreover, this model lacksthe amount of detail needed to fully under-stand the relationships among gender,employment and poverty in a globally inte-grated world.

Dual labour market theory currentlytreats the informal labour market as a singleundifferentiated whole. However, as notedearlier, many types of employment belongunder the broad umbrella ‘informal’: infor-mal employers, own-account workers,informal employees, casual wage workers,domestic workers, unpaid workers in familyenterprises and industrial outworkers (alsocalled homeworkers). The importance ofthese distinctions becomes apparent in thestatistical analysis from six developingcountries examined below.8 The labourforces of these countries are highly seg-mented in terms of gender and employmentstatus and this in turn has an importantimpact on relative earnings and the risk ofpoverty.

Table 3.2 presents information on thecomposition of informal employment – agri-cultural and non-agricultural – for womenand men in the six developing countries.With respect to non-agricultural informalemployment, women are more likely towork as own-account workers, domesticworkers and unpaid contributing workers infamily enterprises than are men. In contrast,

men are more likely to work as employers andwage workers. In general, women are concentrat-ed in the more precarious and lower quality formsof non-agricultural, informal employment, a pointto which we will return later.

Own-account workers in non-agriculturalemployment frequently are a large, if not thelargest, percentage of women’s informal employ-ment. For example, in El Salvador, own-accountworkers represent 52 per cent of women’s informalemployment. In Ghana, non-agricultural own-account activities represent 39 per cent ofwomen’s informal employment – and approximate-ly a fifth of all employment, formal and informal, inthe country. Among the countries portrayed here,only in Egypt and India, where informal agriculturalactivities (especially as unpaid family workers) area particularly important source of employmentfor women, are men more likely to be represent-ed in non-agricultural own-account employment.However, even in these countries, own-account

The Labour Force and Related Characteristics of the Six Countries

POPULATION SIZE:Relatively small: Costa Rica and El SalvadorModerate: Egypt, Ghana and South AfricaLarge: India

ECONOMY:Low-income: Ghana, El Salvador and IndiaMiddle-income: Costa Rica, Egypt and South Africa

WOMEN AND MEN IN EMPLOYMENT AND UNEMPLOYMENT:Employment rates for women range from 40 to 50 per cent in Costa Rica, Egypt, El Salvadorand South Africa to a high of 87 per cent in Ghana; the rate for India is much lower (26%)*:men’s rates are consistently higher and show less variation from country to country.In part this could be due to poor enumeration of women’s employment.

FORMAL/INFORMAL EMPLOYMENT:Informal employment is widespread in all the countries studied. In some cases – notablyIndia and Ghana – informal jobs and activities represent over 90 per cent of all employ-ment opportunities. Even in Costa Rica, the county with the highest shares of formalopportunities, informal employment accounts for nearly half of all employment. In all thecountries except El Salvador (where shares are virtually equal), informal employment rep-resents a larger share of women’s than of men’s employment.

AGRICULTURAL/NON-AGRICULTURAL EMPLOYMENT: In Costa Rica, El Salvador and Ghana, women tend to be concentrated in non-agriculturalinformal employment. However, in Egypt and India informal agriculture is a larger shareof women’s total employment relative to men’s. In these countries, a large number ofwomen are employed informally as unpaid workers on family farms and agriculturalenterprises. This shifts the overall balance of the gender division of informal employmentin these two countries toward agricultural and away from non-agricultural employment.

* The low employment rate for India may be due in part to its definition of the working age population,which begins at age 5. For other countries it begins at age 15. Employment rates for both women and men are lower in India than in the other countries.

8 Countries studied did not distinguish industrial outwork in their labour force statistics. For data on relative wages of industrialoutworkers compared to other categories of informal workers, see Chen et al. 2004.

Box 3.3Box 3.3

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employment remains a significant source ofincome for a large number of women.

Domestic work, a form of wage employmentthat is often informal, also accounts for a large pro-portion of the informal employment opportunitiesavailable to women (although not all countries inthis analysis had detailed data on domestic work-ers).9 Paid domestic work represents what is oftencalled the ‘commodification’ of women’s tradition-al unpaid care work. In Costa Rica and SouthAfrica domestic work represents about a quarter ofwomen’s informal employment. However, not alldomestic workers are informal. In South Africa, forexample, a small but growing number of domesticworkers have unemployment insurance and arethus considered as formal workers (see Chapter 6).Labour legislation in countries such as Chile andPeru also recently extended some aspects ofsocial protection benefits to domestic workers.While this represents an important step, enforcingthe legislation may be difficult.

Even though not all the data for the countriesstudied separate domestic labour from other typesof wage employment, informal wage employmenttends to be a more important source of employmentfor men than for women. For example, informalwage employment is 31 per cent of men’s informalemployment in Egypt, but only 6 per cent ofwomen’s. In South Africa as many as 78 per cent ofmen in informal employment are in wage employ-ment – including agriculture but especially in non-agricultural labour (58%); the comparable figure forwomen is still high (50%) but much less (the SouthAfrica figures exclude domestic employment).

In the countries studied, men generally pre-dominate in informal employment in agriculture –except as unpaid family workers and except in

India, where there are more women than men inagricultural wage employment. Nevertheless, infor-mal agricultural employment remains an importantsource of income-generating work for women, par-ticularly in low-income countries. Informal agricul-tural activities represent over 53 per cent ofwomen’s informal employment in Ghana and over80 per cent in India.

Women often contribute to income-generatingactivities – both agricultural and non-agricultural –without controlling the income they generate.Unpaid work on family agricultural enterprisesaccounts for 20 per cent of women’s informalemployment in Ghana, 34 per cent in India and anastounding 85 per cent in Egypt. Overall, agricul-tural employment accounts for 54 per cent of allemployment in Ghana and 40 per cent in Egypt.Rural employment comprises 76 per cent of allemployment in India. Since most labour force andliving standards surveys do not collect specificinformation on industrial outwork (or homework), across-country comparison is not possible.However, a recent study of employment inAhmedabad City which collected information ondifferent types of informal employment found thathomeworkers accounted for nearly 25 per cent ofwomen’s informal employment but less than 10 percent of men’s (Unni 2000: Table 5.1).

Formal employmentIn general, formal employment is of much betterquality than informal employment. Earnings aresignificantly higher, incomes are more stable,social protections exist and the risk of poverty islower. However, labour force segmentation is alsoapparent with respect to formal employment – withmen and women having differential access to the

CHAPTER 3|Employm

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Percentage Distribution of Women’s and Men’s Informal Employment by Employment Status

Non-agricultural AgriculturalEmployer Own-Account Wage worker Domestic Unpaid Family Employer Own-Account Wage worker Domestic Unpaid Family TOTAL

Costa Rica W 8 37 20 25 6 1 1 1 0 1 100M 14 27 26 10 1 5 11 13 0 3 100

Egypt W 0 4 6 n.a. 3 0 0 2 n.a. 85 100M 3 7 45 n.a. 5 11 4 15 n.a. 10 100

El Salvador W 4 52 16 14 10 0 1 2 n.a. 1 100M 5 19 34 1 3 2 14 16 n.a. 6 100

Ghana W n.a. 39 5 n.a. 3 n.a. 33 0 n.a. 20 100M n.a. 16 15 n.a. 1 n.a. 55 3 n.a. 10 100

India W 0 6 8 n.a. 6 0 11 35 n.a. 34 100M 0 19 16 n.a. 4 0 24 26 n.a. 11 100

South Africa W 3 16 43 26 2 1 2 7 n.a. 0 100M 6 9 58 1 1 2 3 20 n.a. 0 100

n.a.= data not available or insufficient observations to derive statistically significant estimates.Source: Prepared by James Heintz for this report. See table notes at end of chapter.

Table 3.2

9 The lack of data on domestic work likely reflects the absence of a separate category under status in employment. All labour force sur-veys, but not all living standard surveys, enumerate domestic work separately through the classification of employment by industry.

various kinds of formal employment. A globalreport from the ILO following up the Declaration onFundamental Principles and Rights at Workexplores the reasons for this and offers policy sug-gestions to address it (ILO 2003c). Table 3.3 sum-marizes patterns of formal employment for five ofthe six developing countries considered here.

As shown, the vast majority of formal employ-ment is non-agricultural. This is less an indication ofthe relative importance of agriculture for rural workerlivelihoods than a result of the high degree of infor-mality among agricultural employment opportunities.In most of the countries studied, wage employmentarrangements dominate formal employment. Theexception is Ghana where for women (but not formen) formal own-account employment is moreimportant than formal wage employment.

Women have less access to private formalwage employment than men in all country casestudies except El Salvador. This could be due tothe high level of international labour migrationamong male workers in El Salvador who sendincome back home. The remittances, but not theemployment statuses of the overseas migrants, arecaptured by the household surveys. In all the coun-tries studied, public employment is a critical sourceof formal job opportunities for women. In CostaRica, Egypt, El Salvador and South Africa, womenin formal jobs are more likely than men to beemployed in the public sector. Ghana is an excep-tion, but mostly because of the relative importanceof own-account workers in women’s formalemployment. Still, in Ghana, women are six timesmore likely to have a formal public sector job thana formal private sector job.

Other variations in the type of wage employ-ment are apparent. Often, casual wage employ-ment is best classified as a form of informal wageemployment, but this is not always the case. Somecasual workers in Costa Rica have access to social

protections similar to formal, regular employees. In sum, the labour forces of the six countries

are highly segmented in terms of sex and employ-ment status. There is a clear distinction betweenformal and informal employment, with womenmore likely to work in informal activities. The pub-lic sector is important in providing women accessto formal wage employment. However, segmenta-tion is also apparent within the informal labourforce. Outside of agriculture, women are more like-ly to be own account workers, domestic workersand unpaid contributing workers on family enter-prises. Within agriculture, men tend to be dispro-portionately represented among own-accountworkers in the countries investigated. To the extentthat women are concentrated in low-qualityemployment, their risk of poverty will be exacer-bated, all other factors being equal.

Earnings and hours of workPatterns of labour force segmentation by them-selves say little about the average quality of remun-erative work. While a standardized estimate ofearnings, such as hourly earnings, can illustratedifferences in the quality of employment opportuni-ties available to men and women, it is hard to esti-mate these across countries because of differentcurrencies, fluctuations in exchange rates and vari-ations in price levels. When comparisons are pos-sible, they can show the multiple dimensions ofgender inequality in employment. Women are notonly in different and more precarious types ofemployment than men but within a given categorywomen’s earnings are generally lower than men’s.

Patterns in hourly earnings can be more easi-ly compared using relative hourly earnings, that is,average earnings expressed as a percentage of acommon baseline. Table 3.4 shows relative hourlyearnings by employment status category. Hourlyearnings for formal, private non-agricultural wage

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Percentage Distribution of Women’s and Men’s Formal Employment by Type

Non-agricultural AgriculturalEmployer Own-account Wage worker/private Wage worker/public Employer Own-account Wage worker/private Wage worker/public TOTAL

Costa Rica W 2 3 51 40 0 0 4 0 100M 3 5 60 19 1 0 12 0 100

Egypt W 2 1 7 89 0 0 0 1 100M 10 7 15 65 1 0 0 2 100

El Salvador W 1 0 73 26 0 0 0 n.a. 100M 3 0 69 25 1 0 2 n.a. 100

Ghana W n.a. 60 5 33 n.a. 0 2 n.a. 100M n.a. 29 12 55 n.a. 0 4 0 100

South Africa W 6 1 57 33 1 0 2 n.a. 100M 10 2 61 21 2 0 4 n.a. 100

n.a. = data not available or observations insufficient to derive statistically significant estimates.Source: Prepared by James Heintz for this report. See table notes at end of chapter.Note: Summaries of formal employment for the India case study are not strictly comparable to the categories prepared for the five others

Table 3.3Table 3.3

47

workers are used as the basis of comparison, withrelative hourly earnings for other categoriesexpressed as a percentage of this baseline.

In all countries, hourly earnings in most formsof informal and agricultural employment fall wellbelow earnings for formal, non-agriculturalemployment. Two exceptions are informalemployers and, in some cases, informal publicwage workers. In both Costa Rica and El Salvador,hourly earnings for informal employers are equalto or higher than earnings in formal employment.In Ghana and South Africa, estimated hourly earn-ings of informal public wage workers are higher onaverage than earnings in formal, private non-agri-cultural employment.10 In general, public wageemployment, both formal and informal, has higheraverage earnings than private wage employment,Egypt being an exception. This unexpected find-ing may reflect the diversity of public employmentas the public sector encompasses both govern-ment and public enterprises. In many countries,public enterprises are concentrated in utilities,transportation and communication services whereearnings may be higher relative to average earn-ings in the private sector.

Domestic work and informal non-agriculturalown-account employment – employment cate-gories with large numbers of women – have signif-

icantly lower hourly earnings compared to all formsof formal employment and lower earnings relativeto all categories of informal employment shownhere. Average informal earnings in agriculture arealso among the lowest in all the countries featured.However, informal agricultural employmentaccounts for a larger share of men’s employmentthan women’s employment for every country inTable 3.4 except Egypt.

How do earnings of informal, own-accountworkers measure up to those of informal wageworkers?11 Except for El Salvador, hourly earningsin informal private wage employment are higherthan those for own-account workers. These earn-ings also tend to be highly unstable. However, it isimportant to note that the quality of wage employ-ment varies with the type of employment, a dis-tinction that can be lost in aggregate categories.Although own-account employment is a precari-ous type of informal employment, it can be betterin terms of the returns to labour than other types ofinformal employment, such as domestic work orinformal casual wage employment.

For workers in small and microenterprises,which include enterprises operating in the informaleconomy, earnings depend on the size of the firm.Table 3.5 presents estimates compiled from a 2003small and microenterprise survey for Egypt.

Hourly Earnings as a Percentage of the Hourly Earnings of Formal, PrivateNon-agricultural Wage Workers by Employment Status Category

Costa Rica Egypt El Salvador Ghana South Africa

FormalN o n - a g r i c u l t u r a l

Employers 257.0 n.a. 544.0 n.a. n.a.Own-account 141.8 n.a. 654.2 89.6 255.5Private wage 100.0 100.0 100.0 100.0 100.0Public wage 146.1 80.2 174.1 116.1 140.8

A g r i c u l t u r a lPrivate wage 62.8 n.a. 78.0 n.a. 38.2

InformalN o n - a g r i c u l t u r a l

Employers 138.2 n.a. 249.9 n.a. 43.7Own-account 56.3 n.a. 78.5 66.6 29.4All wage n.a. 75.6 n.a. 97.1 53.8Private wage 60.0 77.4 62.7 n.a. 49.6Public wage n.a. 49.3 90.7 106.9 117.2Domestic 28.7 n.a. 27.7 n.a. 16.8

A g r i c u l t u r a lOwn-account 35.2 n.a. 79.2 48.8 n.a.Private wage 34.5 55.3 40.1 49.6 17.2Public wage n.a. n.a. 53.8 n.a. n.a.

n.a.= data not available or insufficient observations to derive statistically significant estimates.Source: Prepared by James Heintz for this report. See table notes at end of chapter.

Table 3.4

10 In both countries, the higher earnings of informal public sector workers reflect the high quality and desirability of public employment,even without full social protections. These earnings estimates could change if alternative criteria were used to distinguish formal frominformal employment.

11 Earnings estimates for own-account workers tend to be inflated due to the presence of unpaid contributing workers in family enterpris-es, with the exception of Ghana, for which estimates were adjusted to reflect these contributions. Unpaid workers generate income thatis attributed to another household member so that estimates of average individual self-employment earnings will tend to be overstated.

Average workers’ wages increase with firm size.However, women account for a decreasing shareof total employment as the size of the firm increas-es. In Egypt, women tend to work in smaller enter-prises and therefore earn less relative to men.

Gender differentials in hourly earnings areapparent in all the countries and in most of theemployment status categories. Table 3.6 presentswomen’s hourly earnings as a percentage of men’sby employment status for Costa Rica, Egypt, ElSalvador, Ghana and South Africa. Women’s hourlyearnings fall below those of men in identicalemployment categories with the notable exceptionof Egypt. The earnings gap is particularly pro-nounced among own-account workers – both agri-cultural and non-agricultural – and is narrowest inpublic wage employment. In El Salvador, women’shourly earnings in public employment even exceedthose of men on average. Women there tend to beconcentrated in secretarial and administrative and

professional employment, while fewer women thanmen are temporary employees and hold lower pay-ing jobs. As a result there is less variance inwomen’s earnings than in men’s.

The case of Egypt is unique among the coun-tries examined here. However, it should be remem-bered that unpaid work in family enterprises (bothagriculture and non-agriculture) accounts for 88per cent of women’s employment in Egypt (Table3.2). These women are not represented in the earn-ings estimates in Table 3.6. The relatively smallnumber of women who work in paid wage employ-ment tend to be highly educated – more so onaverage than the much larger numbers of men inpaid wage employment. This helps explain theirunusually high wages relative to men.

Estimates of earnings can be problematic whenunpaid household members work, and generateincome, in family enterprises. As unpaid workers,their earnings should be zero, but their labour has

Average Wages per Worker and Women’s Share ofEmployment for Small and Microenterprisesby Size, Egypt, 2003 (expressed in 2002 Egyptian pounds)

Size of Firm Average Wages Women as % of Total Employment1 worker 112.8 17.12 to 4 workers 172.1 9.45 to 9 workers 290.1 7.910 to 24 workers 1,073.4 5.9Total (firms of all sizes) 160.1 14.3

Source: Data prepared by Alia El-Mahd for this report. See table notes at end of chapter.Note: There were insufficient observations to determine statistically significant wages for workers in informal enterprises with25 or more workers.

Table 3.5

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Women’s Hourly Earnings as a Percentage of Men’s Hourly EarningsCosta Rica Egypt El Salvador Ghana South Africa

FormalN o n - a g r i c u l t u r a l

Employers 56.6 n.a. 78.9 n.a. n.a.Own-account 62.1 n.a. 45.1 54.6 n.a.Private wage 84.6 151.9 87.5 n.a. 89.5Public wage 87.7 107.6 116.2 84.2 95.6

A g r i c u l t u r a lPrivate wage 85.1 n.a. 105.4 n.a. 66.3

InformalN o n - a g r i c u l t u r a l

Employers 97.6 n.a. 83.8 n.a. 83.6Own-account 50.6 n.a. 65.1 80.2 59.6All wage n.a. 263.3 n.a. 69.8 n.a.Private wage 79.5 317.1 75.4 n.a. 107.0Public wage n.a. n.a. 135.2 88.0 99.2Domestic 57.4 n.a. 56.2 n.a. 100.0

A g r i c u l t u r a lOwn-account 53.3 n.a. 56.9 65.0 n.a.Private wage n.a. n.a. 86.4 n.a. 98.5Public wage n.a. n.a. 177.6 n.a. n.a.

n.a.=data not available or insufficient observations to derive statistically significant estimates.Source: Prepared by James Heintz for this report. See table notes at end of chapter.

Table 3.6

real monetary value; it contributes to householdincome either explicitly (if products are sold) orimplicitly (if households consume what they pro-duce). The fact that, in many countries, women aredisproportionately represented among unpaid work-ers in family enterprises means that their contribu-tions to income generation are often undervalued.

It is important to impute the contribution ofunpaid workers on family enterprise using house-hold survey data, as recommended by the 16th

ICLS (1998). Unless this is done the earnings of theself-employed in a household enterprise will beover-stated. Table 3.7 shows imputed hourly earn-ings for these workers in Ghana. To impute earn-ings for unpaid workers on family enterprises, anaverage hourly rate is computed for all work – paidand unpaid – performed in a particular householdenterprise. This rate is then used to estimate thecontribution of the unpaid family members. InGhana, unpaid work in family enterprises accountsfor 23 per cent of women’s employment. Theimputed hourly earnings in Table 3.7 suggest thatthese women make a significant contribution tohousehold income. More generally, this is animportant correction to make in estimating theearnings of those persons who are self-employedin household enterprises.

Employment income depends on hours ofwork as well as on hourly earnings. Table 3.8 sum-marizes estimated weekly hours of work foremployed men and women by employment status.With some exceptions, women tend to work fewerhours than men in income-generating employ-ment.12 Since women also have lower hourly earn-ings, their employment income is less than that ofmen – often by a significant amount.

Time spent working in unpaid care work couldaccount for some of the gender disparities in aver-age hours of work in income-generating activities.

Table 3.9 shows estimates of hours worked inincome-generating employment and unpaid carework in Ghana. Employed women spend, on aver-age, over four times as many hours in unpaid carework as do employed men. Moreover, self-employed women spend considerably more timeworking in unpaid care work than do women inwage employment. Similar patterns can also beseen for men. In addition, women employed inagriculture spend more time in unpaid care workthan women employed outside of agriculture.However, the same is not true for men employed inagriculture.

One reason why women employed as own-account workers spend longer hours in both unpaidcare work and employment relative to women inwage employment may be labour supply con-straints, as self-employed women are more likely towork at home than those who are wage-employed.If self-employment provides women with the flexi-bility to combine unpaid and remunerative workmore easily, this could help explain the significantlylonger hours worked by self-employed women.

Both below-average and above-averagehours of employment can be symptomatic ofunderemployment of informal workers. Unstableincomes, sporadic production and inadequatedemand often characterize informal work, so thatinformal workers might not be able to work asmany hours as they would like. However, sincemany informal activities are also characterized bylow productivity and low earnings, those in verylow-productivity informal employment might needto work longer hours in order to earn a basicincome. Moreover, the skills of informal workersmay not be fully utilized, despite their long hours.Underemployment can take many different forms,and hours of work, by themselves, are not alwaysa good indicator of underemployment.

Hourly Earnings in Selected Employment Status Categories, Ghana(in cedis and purchasing power parity adjusted U.S. dollars)

Women Men TotalN o n - a g r i c u l t u r a l

Formal, self-employed 588 1,077 1,052($1.11) ($2.04) ($1.98)

Informal, own-account 568 708 604($1.08) ($1.34) ($1.14)

Unpaid family (imputed) 472 293 409($0.89) ($0.55) ($0.77)

A g r i c u l t u r a l

Informal, own-account 336 517 442($0.64) ($0.98) ($0.84)

Unpaid family (imputed) 420 421 421($0.80) ($0.80) ($0.80)

Source: Data prepared by James Heintz for this report. See table notes at end of chapter.

12 Exceptions include women informal own-account workers in El Salvador, unpaid family agricultural workers in Egypt and domesticworkers in South Africa.

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Table 3.7

Summary: gender segmentation andgender gapsThis discussion underscores the multiple dimen-sions of gender inequalities among workers. First,the labour force is segmented in terms of both for-mal and informal employment and women are con-centrated in more precarious and lower qualityemployment. Access to formal employment isrestricted and public employment is often the bestsource of decent, formal jobs for women. Averageearnings also vary across segments of the informallabour force. A hierarchy exists in which womenare disproportionately represented in segmentswith low earnings. In general, informal employershave the highest average earnings followed bytheir employees, then own-account workers andthen casual wage workers and domestic workers.

Second, within a given employment statuscategory, women’s earnings are lower thanmen’s. Only in exceptional cases, such as whereonly highly educated women participate in cer-

tain forms of employment, does this fail to hold.Third, women spend fewer hours in remunerativelabour on average than men, in part due to thehours they spend in unpaid care work.Responsibilities for unpaid care work also rein-force labour force segmentation – women can berestricted to own-account or home-basedemployment, even if total hours worked arelonger and incomes lower.

Taken together, fewer and less rewardingemployment opportunities, lower wages and fewerhours of work mean that employed women earnmuch smaller incomes. All of these factors influ-ence the risk of poverty women face.

Poverty rates and the working poorDemonstrating a relationship between women’swork and poverty requires that the analysis oflabour force segmentation, earnings and hours ofwork be complemented with an examination ofpoverty rates among employed women and men.

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Average Weekly Hours of Work by Sex and Employment Status

Formal Informal

N o n - a g r i c u l t u r a l A g r i c . N o n - a g r i c u l t u r a l A g r i c u l t u r a lOwn-account Private wage Public wage Private wage Own-account Private wage Public wage Domestic Own-account Private wage Unpaid

Costa Rica W 28.6 45.3 43.8 49.8 30.9 42.7 34.9 36.6 24.6 n.a. 32.8M 45.7 53.3 49.5 54.2 49.3 49.1 42.9 45.3 40.4 40.4 40.2

Egypt W n.a. 44.3 39.4 n.a. 41.6 51.4 n.a. n.a. n.a. n.a. 84.1M 58.9 54.8 45.1 n.a. 44.1 51.3 47.5 n.a. 51.2 40.0 51.0

El Salvador W 52.0 46.0 39.0 44.0 41.0 46.0 39.0 58.0 31.0 41.0 33.0M 37.0 49.0 45.0 51.0 43.0 45.0 44.0 51.0 37.0 38.0 36.0

Ghana W 57.9 n.a. 43.4 n.a. 54.6 n.a. 43.1 n.a. 37.0 n.a. 22.7M 61.5 47.8 47.4 50.7 58.9 n.a. 50.8 n.a. 41.1 51.7 28.6

South Africa W 47.6 44.0 42.2 48.5 43.3 44.2 38.3 40.8 14.2 46.1 26.3M 49.7 46.9 43.9 48.2 45.2 48.8 44.2 39.1 25.3 47.6 57.5

n.a.=data not available or insufficient observations to derive statistically significant estimates.Source: Prepared by James Heintz for this report. See table notes at end of chapter.

Table 3.8Table 3.8

Total Hours Worked per Week in Employment and Unpaid Care Work,Employed Population (15+), Ghana, 1998/1999

Women MenUnpaid care work Employment Total Unpaid care work Employment Total

F o r m a l e m p l o y m e n t , n o n - a g r i c u l t u r a lPrivate wage employment n.a. n.a. n.a. 7.6 47.8 55.4Public wage employment 30.0 43.4 73.4 8.8 47.4 56.2Self-employed 33.8 57.9 91.7 9.7 61.5 71.2

I n f o r m a l e m p l o y m e n t , n o n - a g r i c u l t u r a lOwn-account 39.8 54.6 94.4 11.0 58.9 69.9Wage employment 31.5 52.9 84.4 9.4 55.8 65.2Unpaid family 33.7 n.a. n.a. 17.9 n.a. n.a.

I n f o r m a l e m p l o y m e n t , a g r i c u l t u r a lOwn-account 46.7 37.0 83.7 9.2 41.1 50.3Wage employment n.a n.a. n.a. 9.7 51.7 61.4Unpaid family 46.4 22.7 69.1 9.6 28.6 38.2TOTAL 42.4 46.3 88.7 9.7 47.9 57.6

Source: Prepared by James Heintz for this report. See table notes at end of chapter.

Table 3.9Table 3.9

One way to measure the poverty rates of employedpersons is to define the proportion of all employedpersons in different employment statuses that arefrom poor households as the ‘working poor’. Thisdefinition allows us to analyse the link betweenemployment status and the risk of poverty thatindividuals face. As used here, individuals are con-sidered to be ‘working poor’ if they were bothemployed and living in households whose incomesplace them below the poverty line.13 This definitionof ‘working poor’ represents one technique forconnecting the characteristics of employment,measured at the individual level, to the risk ofpoverty, measured at the household level. Whatthis method allows us to do is to explore the linksbetween gender, employment and poverty and not– as in many studies of feminized poverty – arguethat the relationship between women and povertyis articulated primarily in terms of the sex of thehousehold head.14

Table 3.10 shows how the working poormeasurement of poverty rates has been applied inthe case of El Salvador. Not surprisingly, many ofthe patterns already observed with respect toearnings are also apparent in the estimated pover-ty rates. The lowest risks of poverty are foundamong formal, non-agricultural workers, whilepoverty is more prevalent among agricultural work-ers. Moreover, workers in public employment, bothformal and informal, have some of the lowestpoverty rates among the relevant comparisongroup – all formal workers or all informal workers.

Similar patterns can be observed for the other

countries examined here. However, comparingpoverty rates across countries is problematic.Poverty standards, household composition, pricesand consumption baskets all vary from country tocountry. To avoid this problem, we can apply thesame methodology that we applied earlier to com-parisons of hourly earnings in order to comparepoverty rates – that is, use relative poverty ratesamong the working poor. By relative poverty rateswe mean the average poverty rate expressed as apercentage of a common baseline. This allows usto use a similar baseline as was used earlier to cal-culate relative hourly earnings: the working poorpoverty rate for non-agricultural, private formalwage employees. However, the definition differsfrom other usages that refer to the extent ofinequality within a given income distribution.

For example, if the poverty rate among non-agricultural, private formal wage employees were15 per cent and the poverty rate among informaldomestic workers were 45 per cent, then the rel-ative poverty rate for informal domestic workerswould be 300 per cent (or three times the pover-ty rate of non-agricultural, private formal wageemployees).

Relative poverty rates of male and femaleworkers in Costa Rica, Egypt, El Salvador andGhana (Table 3.11) show the same patternsemerging as in El Salvador: relative poverty ratesamong informal workers are higher than thoseamong formal workers and informal agriculturalworkers have the highest risk for poverty. Povertyrates among women working in non-agricultural

Working Poor as a Percentage of Employment (15+) in Selected Employment Statuses by Sex,2003, El Salvador

Women MenF o r m a l , n o n - a g r i c u l t u r a l

Private wage employees 15 17Public wage employees 5 13

F o r m a l , a g r i c u l t u r a lPrivate wage employees n.a. 30

I n f o r m a l , n o n - a g r i c u l t u r a lEmployers 17 13Own-account workers 35 30Private wage employees 31 33Public wage employees 22 26Domestic workers 29 35Unpaid family workers 31 35

I n f o r m a l , a g r i c u l t u r a lOwn-account workers 57 65Private wage employees 51 55Unpaid family workers 61 62

n.a. =data not available or insufficient observations to derive statistically significant estimates.Source: Prepared by FUNDE for this report. See table notes at end of chapter.

Table 3.10

13 The working poor poverty rates described here represent income poverty estimates, not consumption or expenditure-based measure-ments of poverty.

14 The data for household income may include earnings from children. But as labour force data generally refer to age 15 and above, thelinks between children’s work and household poverty are not analysed here.

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informal activities – particularly as own-accountworkers, or unpaid workers on family enterprises– are also substantially higher.

The working poor poverty rates estimatedfor the country studies indicate that gender-based differences in poverty rates among work-ing women and men are complex. Clearly,women are concentrated in forms of employmentwith high rates of poverty. However, no system-atic pattern emerged in the country case studiesin terms of differences between men’s andwomen’s poverty rates within a particularemployment status category. This is strikingsince there was a clear gap between women’sand men’s earnings in the same employment cat-egory, as documented in the previous section.

The complexity in analysing gender-baseddifferences in poverty among working peopleresults from the need to combine poverty meas-urements (made at the household level) withemployment data (collected at the individuallevel). Other variables – such as the factors thatdetermine women’s labour force participation,reproductive choices and household composi-tion – influence the correlation between povertyrates and employment status along gender lines.

For example, in households with two ormore adults, at least one of whom is male andemployed, women’s labour supply responds topressures on household resources and intra-household gender dynamics. These factorsinfluence the allocation of women’s timebetween market and non-market activities. As aresult, households in which women are engagedin remunerative work might have lower povertyrates relative to households in which women donot allocate time to income-generating activities– that is, women’s employment income makes asignificant difference in the poverty status offamilies with multiple earners. Therefore, ahousehold’s poverty status can be determinedby women’s access to paid employment, whichitself is influenced by income constraints and

gender power dynamics within the family.Similarly, the composition of households – e.g.,the number of children – influences both pover-ty rates and women’s labour supply decisions.

Because of the complexities associated withdifferences in poverty rates among working menand women, it helps to supplement the estimatesof the working poor poverty rates with an analy-sis of poverty rates at the household level inorder to take into account such factors as thenumber of earners per household. Table 3.12presents estimates of poverty rates among SouthAfrican households with different sources ofemployment income. Households are catego-rized by (1) number of earners, (2) sex of the headof household, (3) sex of the primary earner and(4) whether the majority of the household’sincome was derived from formal or informalsources.

The table reveals some striking patterns.Households that depend primarily on informalemployment income have significantly higherpoverty rates than households with a majority ofincome coming from formal employment. Thegender differentials in poverty become muchmore evident at the household level. Female-headed households have significantly higherpoverty rates than male-headed household.However, this differential is much less pro-nounced when households have access to for-mal employment. A similar pattern can beobserved when comparing households whoseprimary earner is female compared to house-holds whose primary earner is male.

A few words of caution are necessary, how-ever, in drawing conclusions from this example.The link between female headship and povertyvaries from country to country. Statistical analy-sis of large, national data sets for developingcountries show that while female-headed house-holds are poorer in some of them, the evidence isby no means conclusive (UN 1995:129). Oneimportant factor is that female-headed house-

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Relative Poverty Rates: Working Poor Poverty Rates by Sex and EmploymentStatus Category and Formal and Informal Employment, as a Percentage of thePoverty Rate for Formal Private Non-agricultural Wage Workers

Formal Informal

N o n - a g r i c u l t u r a l A g r i c . N o n - a g r i c u l t u r a l A g r i c u l t u r a lOwn-account Private wage Public wage Private wage Own-account Private wage Public wage Domestic Unpaid Own-account Private wage Unpaid

Costa Rica W n.a. 100 n.a. n.a. 735 330 n.a. 678 757 n.a. n.a. n.a.M n.a. 100 51 244 249 205 n.a. n.a. 158 644 598 571

Egypt W n.a. 100 64 n.a. 416 293 n.a. n.a. 219 n.a. n.a. 281M 69 100 100 n.a. 218 200 n.a. n.a. 86 192 263 205

El Salvador W n.a. 100 30 n.a. 233 207 145 193 206 372 338 398M 197 100 80 184 179 197 155 210 214 573 161 376

Ghana W 233 100 164 n.a. 257 n.a. 177 n.a. 314 334 n.a. 394M 173 100 166 n.a. 146 n.a. 174 n.a. 226 275 215 305

n.a.=data not available or insufficient observations to derive statistically significant estimates.Source: Prepared by James Heintz for this report. See table notes at end of chapter.

Table 3.11Table 3.11

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holds are not a homogeneous category. It isimportant to understand the different socialprocesses (i.e., migration, widowhood, divorce,separation, staying single) that lead to femaleheadedness; as well as the number, sex and ageof the children and adult persons in the house-hold (Folbre 1990). There are many types offemale-headed households and this analysis dis-aggregates them by only two additional criteria:the primary source of employment income (for-mal and informal) and number of earners. Evenso, the example illustrates the importance of thetype of employment income and number of earn-ers in determining women’s risk of poverty.

As expected, poverty rates decline as thenumber of earners increases, suggesting thatlabour supply decisions can have a significantimpact on household poverty. Again, caution isneeded when interpreting gender-based differ-ences in individual working poor poverty rateswithin a given employment status category.

The risk of poverty also varies from industryto industry and with the type of informal employ-ment. Table 3.13 presents estimates from arecent study of informal employment and pover-ty in India. It shows poverty rates for householdsthat sustain themselves on informal employmentincome by broad industrial sector and employ-ment type. In this case, households classified as

sustaining themselves on informal employmentincome are households with at least one personemployed as an informal worker and no otherhousehold member employed outside of theinformal economy.

The table shows the importance of the typeof informal wage employment. Households withincomes below the poverty line are classified as‘poor’ while those with incomes less than 75 percent of the poverty line are classified as ‘verypoor’. Households that depend on informal, reg-ular wage employment have lower poverty ratesrelative to households that rely on self-employ-ment or casual wage income. The highest pover-ty rates are among households that sustainthemselves on casual wage employment. Forexample, over one-fifth of such households arevery poor while 47 per cent – nearly half – arepoor. This hierarchy of poverty risk – regularwage employment having the lowest, self-employment the next highest and casual wageemployment the highest risk – is robust acrossindustrial sectors in urban India

.A hierarchy of poverty riskJust as there is a hierarchy of earnings, there is ahierarchy of poverty risk associated with the seg-mentation of the labour force. Figures 3.1-3.3illustrate the hierarchies of earnings and poverty

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Poverty Rates by Household Type, South Africa, 2003*

Head of Household** Primary Earner (identified in the Labour Force Survey) (largest share of HH earnings)Female-headed Male-headed Female Male

M a j o r i t y o f e a r n e d i n c o m e f r o m i n f o r m a l e m p l o y m e n tOne earner (age 15 years +) 63.7 48.3 58.5 40.9Two earners (age 15 years +) 49.1 35.4 44.2 33.5More than two earners 43.0 28.4 n.a. 25.4

M a j o r i t y o f e a r n e d i n c o m e f r o m f o r m a l e m p l o y m e n tOne earner (age 15 years +) 18.0 13.7 13.1 11.8Two earners (age 15 years +) 11.0 5.0 n.a. 4.4More than two earners n.a. n.a. n.a. n.a.

Source: Prepared by D. Casale, C. Muller and D. Posel for this report. See table notes at end of chapter.* Estimates based on employment income only since information on other income sources is not available in the South African Labour Force Survey.**The definition of head of household is de facto, rather than de jure.

Table 3.12

Poverty Rates Among Persons in Households Sustaining Themselves on Informal Income, Urban India, 1999/2000

Household Employment Income TypeIndustrial Sector Self-employed Regular wage employment Casual wage employment

Very poor Poor Very poor Poor Very Poor PoorManufacturing 8.90 25.89 6.76 21.30 18.52 41.55Construction 6.76 20.28 5.91 14.70 19.48 43.35Trade 8.27 21.01 7.24 19.11 17.20 36.99All urban employment 9.53 24.71 7.42 21.57 22.86 47.06

Source: Sastry 2004. See table notes at end of chapter.

Table 3.13

risk based on the evidence presented here and inother studies. These diagrams provide a succinctsummary of the lessons of this chapter and canbe used as advocacy tools to underscore the crit-ical importance of the intersection of gender,employment, and poverty. They also provide astructure for framing further research on theseinterrelationships.

Figure 3.1 shows the hierarchy of earningswithin the informal labour force suggested by thecase studies presented here and other country-specific studies of industrial outworkers andcasual informal wage employment. Earnings arehighest among informal employers and regularinformal wage workers, dominated by men’semployment, and lowest among casual wageworkers and industrial outworkers, dominated bywomen’s employment. In earlier statistical analy-ses, industrial outworkers were found to have thelowest average earnings of all (Charmes andLekehal n.d.; Chen and Snodgrass 2001).

This chapter also presented evidence of thehierarchy of poverty risk among households thatdepend on different sources of employmentincome (Figure 3.2). Households that rely prima-rily on income from informal employment facehigher poverty rates than those that rely onincome from formal employment. These patternssuggest a general hierarchy of household pover-ty risk rooted in a multi-segmented labour force(Figure 3.3). Households that depend on themost precarious forms of informal employmentare likely to have substantially higher povertyrates than those that have access to more stableand better quality employment.

In developing countries many workingwomen face a disproportionate risk of povertycompared to working men. Labour force seg-mentation means that women tend to be con-fined to activities in which earnings are low andpoverty rates are high. However, the risk ofpoverty among women engaged in remunerativework is directly linked to dynamics within thehousehold. Women’s labour force participationcan help keep a family out of poverty. However,in households with multiple earners – at least onebeing male – women still earn less income thanmen, although women’s earnings contribute tolower household poverty rates and can thusimprove human development outcomes.

Women’s risk of poverty can be much morepronounced in female-headed households or inhouseholds in which a woman is the primaryearner. Access to formal employment attenuatesthis risk dramatically. However, decent formalemployment for women tends to be predomi-nantly in the public sector, now being cut severe-ly in developing countries. As employmentopportunities become less and less formal (andmore and more accessible to women), the risk ofpoverty increases dramatically.

Poverty Risk of Households byPrimary Source of Income

POVERTY RISK

Low Formal WageEmployment

Informal Self-Employment:Employers

Regular Informal Wage Employment

Informal Self Employment: Own Account

Casual Informal Wage Employment and Domestic Work

Industrial Outwork

High

Fig. 3.3

Poverty Risk of Households bySources of Income

POVERTY RISK

Low

Only Formal Sources

Both Formal andInformal Sources

Only Informal SourcesHigh

Fig. 3.2

Segmentation of Informal Employment by Average Earnings and Sex

AVERAGE EARNINGS SEGMENTATION BY SEX

HighMainly menEmployers

Regular Informal Wage Workers

Women

Own Account Operators& men

Casual Informal Wage Workers and Domestic Workers

Industrial Outworkers/HomeworkersLow Mainly women

Fig. 3.1

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Labour Markets and Labour ForceStatisticsThe findings presented in this chapter point tothe important effects of the structure of the work-force on poverty and equality outcomes. Indeveloping countries, employment growth forwomen has been largely in low-wage manufac-turing, informal trading (e.g., working as streetvendors) and low-productivity services in whichhigh levels of formal skills are relatively unimpor-tant, where on-the-job training is brief (if it existsat all) and there are few (if any) benefits or legalprotection. In developed countries, much of thejob growth for women has been in part-time andtemporary jobs of various kinds. Whatever thecausal factors, this pattern of feminization of thelabour force is not conducive to reducing pover-ty or enhancing equality.

The findings presented here also haveimportant implications for how we think aboutlabour markets. Labour economists often focuson the supply and demand of wage labour andmodel the institutional setting in which labour isexchanged for a wage. In this framework, work-ers supply labour power and firms demand it.Unemployment is simply a situation in whichsuch labour markets, narrowly defined, areunable to adjust wages so that those wantingemployment (labour supply) match those offeringemployment (labour demand). As noted earlier,dual labour market theories assume that thosewho cannot find work in the formal labour mar-ket, but are still willing to work, are seamlesslyabsorbed into the informal economy.

This view of labour markets as the interac-tion between the supply of and demand forwaged labour excludes important categories ofthe labour force – particularly in developingcountries. First, it leaves out significant numbersof self-employed persons, including those whohire others, those who work on their own accountand those who are unpaid workers in familyenterprises. Second, it tends to conflate the var-ious types of waged workers: formal salariedworkers in both private and public enterprises,employees of informal enterprises, contracted orsub-contracted workers of various kinds,domestic workers and casual day labourers.Third, it fails to estimate or account for the extentof underemployment, including among the self-employed, which often more accurately capturesthe employment problem in developing countriesthan does unemployment.

To reflect the reality of the global labourforce in today’s world, an expanded definition oflabour markets is needed. James Heintz, one ofthe authors of this report, proposes the following:“All production and exchange activities thatimpact employment, conditions of work andreturns to labour.” Clearly, not all members of thelabour force sell their labour or only their labour.

Some sell goods or specialized services. Someof those who sell goods first buy them from oth-ers. Many of those who sell goods also producethem: by investing their capital and hiring others,or by investing their capital and their labour and,often, the labour of other family members. Theself-employed workers who both produce andsell often have to source raw materials or inter-mediate goods from suppliers. Others, such asdomestic workers, sell their labour directly to thefinal consumer. In many of these transactions,prices – other than wages – are the marketmechanism.

Only when economists and developmentplanners operate with a model of the labour mar-ket that includes rather than omits the majority ofworking people in the global economy will theybe able to understand the links between povertyand employment, and how these links are deter-mined by class, gender and other sources of dis-advantage. Such an understanding is essential tocombating poverty and gender inequality.

This chapter has provided a framework foranalysing the gendered segmentation of thelabour force – both formal and informal—and haspresented country data to illustrate the distribu-tion of the male and female workforce acrossthese segments, average earnings by sex acrossthe segments and poverty risk by sex across thesegments. This framework suggests one way to

A seller of traditional breads, Uzbekistan. Photo: Nick Coleman/AFP/Getty

simultaneously measure the feminization of theworkforce, the informalization of the workforceand the feminization of poverty. Our hope is thatit has shown the usefulness and importance ofthese data and this kind of analysis.

Much more needs to be done to improveemployment and earnings data before an analy-sis such as this can be undertaken on a widerscale. More countries need to collect statisticson the informal employment, and countries thatalready do so need to improve the quality of thestatistics that they collect. The development ofstatistics on earnings and working conditions ininformal employment presents special problems.Methodological work needs to be undertaken toprepare guidelines for both the collection andcompilation of these data. In addition, in order toundertake an analysis of employment and pover-ty, attention needs to be given at the nationallevel to linking labour force and income andexpenditure surveys. Moreover, allocatingresources for establishing a crucial foundation ofrelevant employment statistics must be a prioritywithin the poverty reduction strategies devel-oped by individual countries. This chapter hasalso shown the need to develop an overarchingframework that allows the classification andanalysis of the full set of employment statusesthat exist in both developed and developingcountries.

It is to be hoped that the recommendedemployment indicator for Goal 3 of the MDGs willprovide an impetus for furthering the requiredwork in statistics. Its adoption for internationalmonitoring and its use for monitoring at theregional and national levels would stimulateadditional resources and work by statisticians indeveloping these data, researchers in analysingthem and advocates in using them.

In conclusion, the quantity and quality ofemployment available to women, men andhouseholds matter a great deal in determiningwho is poor and who is not – not only in terms ofincome poverty but also in terms of other dimen-sions of poverty. Only when these issues arefully integrated into economic policies and devel-opment strategies will sustainable solutions togender inequalities, poverty and other humandevelopment deficits be realized. The conceptu-al tools and the pioneering data analysis pre-sented in this chapter, and the cost-benefitanalysis of informal work presented in the nextchapter, point the way for future data analysisand policy research to underscore this reality.

Table Notes: General

The format for the country studies was developed by JamesHeintz, Joann Vanek and Marty Chen in consultation with RalfHussmanns and Marie Thérèse Dupré at ILO. Funding for coun-try case studies was provided by UNIFEM. ILO supported prepa-ration of the report by James Heintz, “Summary of country case-studies and tabulations for 2005 Progress of the World’sWomen.”

Tables 3.2 through 3.13 are based on research commissionedfor this report, although several of the tables incorporate esti-mates for India drawn from an earlier report. The estimates pre-sented in the tables were compiled from the following sources:

Costa Rica. Estimates based on the 2003 EncuestaPermanente de Hogares de Propósitos Múltiples, administeredby the Costa Rican national statistics institute (Instituto Nacionalde Estadística y Censos, INEC). Research led by Jesper Venema,ILO Regional Office, Panama.

Egypt. Two sets of estimates for Egypt were compiled, onebased on household survey data and the other based on a sur-vey of small and microenterprises. The household survey esti-mates were used for all tables except Table 3.5. For the esti-mates based on household survey data, the 1998 EgyptianLabour Market Survey (ELMS) was used. This survey was car-ried out by the Central Agency for Public Mobilization andStatistics (CAPMAS) with the cooperation of the EconomicResearch Forum (ERF) in Cairo. Researcher: Mona Amer,University of Cairo. For the estimates based on enterprise sur-vey data, the 2003 Micro- and Small Enterprise Survey wasused. The survey was carried out by the Cairo DemographicCenter. Researcher: Alia El-Mahdi, University of Cairo.

El Salvador. Estimates based on the 2003 Encuesta deHogares de Propósitos Múltiples, (EHPM) administered by theGeneral Office of Statistics and the Census (Dirección GeneraldeEstadistica y Censos). Researchers: Edgar Lara López andReinaldo Chanchán, FUNDE (Fundación Nacional para elDesarrollo), with the assistance of Sarah Gammage.

Ghana. Estimates based on the 1998/1999 Ghana LivingStandards Survey (GLSS 4) administered by the GhanaStatistical Service. Researcher: James Heintz.

India. Estimates based on the 55th round of the NationalSample Survey, 1999-2000 and drawn from the 2000 “Report onStatistical Studies Relating to Informal Economy in India” byProf. N.S. Sastry (National Council for Applied EconomicResearch). The report was funded by UNDP, India.

South Africa. Estimates based on the September 2003Labour Force Survey administered by Statistics South Africa.Researchers: Daniela Casale, Colette Muller and Dorrit Posel,University of KwaZulu Natal, Durban.

Unless otherwise noted, the tabulations are of employedindividuals, 15 years of age or older. No upper age limit isplaced on the estimates with the exception of South Africa,where women become eligible for pensions at 60 and men at65 and the estimates are therefore for women aged 15-60 andmen aged 15-65.

Table Notes: Specific

Tables 3.2 and 3.3. Employment status classifications arebased on an individual’s primary occupation for personsengaged in multiple employment activities.

Informal employers and own-account workers are distin-guished from formal employers and own-account workers usingone of two criteria: (1) whether the enterprise is registered witha government agency or (2) the size of the enterprise.Registration is used for the studies of Egypt, Ghana, India andSouth Africa. Size of the enterprise was used for Costa Rica andEl Salvador. In both cases, an enterprise was deemed informal ifit had five or fewer people working in it.

Informal wage employment was distinguished from formalwage employment using one or more of the following criteria:existence of paid leave, a pension scheme and/or contributions

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to the social security system. The exact set of criteria variedfrom country to country depending on available data: Costa Rica(social security), Egypt (social security), El Salvador (socialsecurity), Ghana (paid leave and pension), India (social security)and South Africa (paid leave, pension and social security). Inaddition, for the Indian estimates only, casual and part-timeemployees are also counted as informal wage employees.

Several countries do not provide disaggregated data for thecategory domestic workers. In these cases, domestic workerswould be included as private wage employees and classified asformal or informal using the above classification criteria.

Table 3.4. There is not a one-to-one correspondence betweenthe employment status categories listed under ‘formal’ and‘informal’ employment. Employment status categories forwhich there was no data, too little data for statistical compar-isons or no meaningful interpretation across all countries wereexcluded (e.g., ‘formal domestic workers’ or ‘formal unpaidworkers on family enterprises’). In addition, there are uncer-tainties to measuring earnings that should be kept in mindwhen interpreting these results. Earnings from formal employ-ment are likely to be underestimated, as people frequently donot know the value of non-monetary earnings. Also, employ-ment at the lower end of the distribution may be underrepre-sented in these earnings estimations, since a significant num-ber of workers report no earnings and thus are not included inthe calculations. Therefore, the ‘n.a.’ in Table 3.4 might repre-sent a lack of adequate information rather than limited employ-ment in low-income activities.

Tables 3.4 and 3.6. Hourly earnings include all reportedemployment income. Usual hours worked were used to com-pute a standard hourly rate. Individuals reporting excessivehours worked (generally, more than 140 per week) weredropped. The value of non-wage benefits and in-kind paymentswere included in earnings calculations. However, there is a ten-dency to underestimate these contributions. Also, onlyemployed persons who reported their income are included inthe estimations. The computation of self-employment incomevaries from country to country. For the Egyptian householddata, no information on self-employment income is provided. Inmost cases, self-employment earnings included the value ofgoods produced in a family enterprise. The following are spe-cific notes on earnings estimations by country.

Costa Rica: Earnings of waged employees are adjusted for non-wage payments. Estimates of self-employment income arebased on reported profits and adjusted for the value of house-hold consumption of goods produced.

Egypt: Earnings available only for wage employees and com-prise the basic wage, supplemental wage, allowances, bonus-es, incentives, overtime, profit sharing and other monetaryearnings.

El Salvador: Reported earnings are used for all categories ofemployment. Only employed individuals reporting positiveearnings are included in these estimates.

Ghana: Earnings of waged employees are adjusted for non-wage payments. Estimates of self-employment income arebased on respondents’ estimates of net employment earningsof the enterprise and adjusted for the value of household con-sumption of goods produced.

South Africa: Earnings reported represent gross earningsincluding overtime, allowances and bonuses and before deduc-tions. Respondents are able to provide their earnings as eitheran absolute value or in an earnings bracket. Where informationon earnings brackets only was provided, the value of the mid-point of the bracket was used. Estimates of self-employmentincome are based on respondents’ estimates of net employ-ment earnings. In-kind and non-monetary income is likely notincluded in these estimates.

Table 3.5. Estimates of wages by enterprise size in Egypt arebased on enterprise survey data, not household survey data(see above).

Table 3.7. See notes for Ghana above. To impute averagehourly earnings, the self-employment income for individualsworking on family enterprises was redistributed among familymembers reporting that they were self-employed or wereunpaid family workers. Total self-employment income from thefamily enterprise was divided by total hours worked on theenterprise – including the hours worked by unpaid family mem-bers. This average hourly rate was then multiplied by each indi-vidual’s working hours to re-estimate each individual’s self-employment income. Earnings in cedis were converted to dol-lars using the average market exchange rate over the sampleperiod. Purchasing power parity (PPP) conversions were madeusing the 1999 PPP conversion factor reported by the WorldBank’s World Development Indicators database.

Table 3.8. Usual hours worked were used to compute a stan-dard hourly rate. Only employed persons who reported hours ofpaid work were used in compiling these estimates.

Table 3.9. Usual hours worked were used to compute a stan-dard hourly rate. Only employed persons who reported hours ofpaid employment and unpaid (non-market) caring labour wereused in compiling these estimates.

Table 3.10. Individuals are considered to be ‘working poor’ ifthey live in households whose total income – employment andnon-employment – falls below a national poverty line.Therefore, the poverty rates in this table are a measure ofincome poverty, not consumption poverty. For El Salvador, a percapita poverty line is used, multiplied by the number of house-hold members without adjustments based on an adult equiva-lence scale.

Table 3.11. Individuals are considered to be ‘working poor’ ifthey live in households whose total income – employment andnon-employment – falls below a national poverty line.Therefore, the poverty rates in this table are a measure ofincome poverty, not consumption poverty. For Costa Rica andGhana, the poverty line is adjusted for household size using anadult equivalency scale. For Egypt, poverty rates were calculat-ed on the basis of a wealth asset index as the 1998 ELMS datadoes not include information on household expenditures. Thiswealth asset index was calculated using a factor analysis.Households defined as poor are households belonging to thetwo lowest quintiles of the wealth index. For El Salvador, a percapita poverty line is used, multiplied by the number of house-hold members to determine the household poverty line.

Table 3.12. Poor households are those whose incomes fallbelow a poverty line. Poverty lines are set and adjusted forhousehold size and composition. The poverty line used for thistable equals 494 rands per adult equivalent per month in 2003prices. The poverty line represents the per adult equivalenthousehold subsistence level (HSL) set by the Institute forDevelopment Planning Research at the University of PortElizabeth, South Africa (see Woolard and Leibbrandt, 2001:49).For these estimates, only employment income was used todetermine an individual’s poverty status, since the SouthAfrican Labour Force Survey does not contain data on allsources of income. The survey also does not distinguishbetween formal and acting heads of households.

Table 3.13. Households classified as sustaining themselveson informal employment income are households with at leastone person employed as an informal worker and no otherhousehold member employed outside of the informal economy.All households with income below the poverty line are classi-fied as poor. Households with income below 75 per cent of thepoverty line are classified as very poor.

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4CHAPTERThe Reality of Women’sInformal Work

A vendor carrying birds for sale, Manila,

the Philippines.Photo: Joel

Nito/AFP/Getty

The poverty and other outcomes of work area function not only of the level of earningsbut also of the period over which earningsare sustained and the arrangementsthrough which they are achieved, including

related costs and benefits. A large share of theglobal workforce, especially in developing coun-tries, is engaged in informal employment – either intraditional forms or in new forms associated withtrade liberalization and growing labour marketinformalization.

This chapter shifts the focus from how muchwomen and men earn and whether they are poorto how women and men earn and why they arepoor. It focuses on the costs and benefits associ-ated with the different types of informal employ-ment, especially those in which working poorwomen are concentrated, and suggests new waysof thinking about poverty, gender and informallabour markets based on this analysis.

It is often assumed that many if not most ofthose who work informally do so because of theadvantages it offers compared to working formally(Maloney 2004). But this assumption is made pri-marily by those who focus on the self-employed –and often on the more entrepreneurial amongthese – rather than on informal wage workers. Italso tends to overlook the negative aspects ofinformal work and downplay the fact that informalworkers do not enjoy many of the positive aspectsof formal work because they are not registered andare not recognized by the state. In short, the bene-fits of informal employment tend to be overstatedand the costs understated. For a more realistic pic-ture, we need to look at both the costs and bene-fits of informal work from the perspective of theworking poor, especially women.

Nature of Informal WorkUnderstanding the full costs and benefits of infor-mal work requires first of all understanding thenature of informal work, which is complex andchanging (Chen et al. 2004). In many developingcountries especially, different systems of produc-tion and exchange operate side-by-side.Manufacturing takes place in modern factories orin small workshops, on sidewalks and at home.Construction is carried out using manual labourand rickety scaffolding as well as modern diggers

and cranes. Goods are bought and sold in privatehomes, street markets, kiosks and small shops, aswell as modern supermarkets and shoppingplazas. The expanding service sector includes per-sonal services as well as data entry and call cen-tres for airlines, hospitals and other service indus-tries.

Adding to this diversity, production is increas-ingly global as firms move to or operate throughnetworks or chains of firms in countries all over theworld. Computers and related technologies facili-tate all aspects of production and exchange fromproduct design to production to marketing. The barcode helps retail firms respond quickly to shifts inconsumer demand; and digital graphics technolo-gy helps them transfer designs to their suppliers. Inorder to respond quickly, manufacturing firms seekflexibility in their labour relations by sub-contract-ing out various tasks, hiring workers on repeatshort-term contracts or maintaining a minimumcore work force with a reserve labour force mobi-lized during peak seasons.

Three dimensions of work arrangements areuseful in determining the nature, costs and benefitsof informal work: place of work, employment rela-tions and production system.

Place of work The conventional view of the workplace is of a fac-tory, shop or office, as well as formal service outletssuch as clinics and schools. But this has alwaysexcluded the workplaces of millions of people,more so in developing than developed countries,namely, those in informal employment. Today, asinformal employment is rising everywhere, a moreinclusive classification of the workplace is critical.

Some informal economic activities are locatedin conventional workplaces such as registeredshops or offices. But, typically, informal activitiesare located in non-conventional places, includingprivate homes, open spaces and unregisteredshops and workshops.

Each place of work is associated with speci-fic risks, and thus different degrees of security orinsecurity, for those who work in them. The relevantfactors include:

� ownership and security of tenure of the site;� relationships of control at the work site: with

“Risk is the acceptance of endangering one’s honour, or safety orfuture, in order to earn an income or to cover immediate expenses.”

Working poor man, Egypt (cited in Narayan 2000)

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fellow workers, with an employer, with otherinterest groups, with public authorities and/orwith family members;

� costs of securing the site (and especially entrycosts for poorer women);

� the access to infrastructure needed for work,such as electricity (for light and power), water,toilets, garbage removal, storage of goods;

� access to customers and suppliers;� potential for upgrading the conditions at the

worksite;� ability of informal workers to organize at the site

or away from it in order to secure representationof their interests;

� risks and hazards associated with the site.

Private homes – Significant numbers of peo-ple work from their own homes, including ownaccount operators, unpaid contributing familymembers and industrial outworkers.1 Among thebenefits of working at home, often mentioned bywomen, is the ability to carry out both paid workand housework plus child or elder care. This multi-tasking, which may be seen as a ‘benefit’ in termsof enabling women to fulfil multiple expectations,also imposes concrete costs. When a home-basedworker stops work in order to care for a child orcook a meal, her productivity drops – and so doesher income.

In some circumstances, working from homemay be more physically safe for women. In others,it can increase their vulnerability – as they are lessvisible and less likely to be legally recognized asworkers – and limit their access to social protectionmeasures, chances to upgrade their skills oropportunities to organize collectively. Also, thosewho work at home are less likely than those whowork in a workplace outside the home to developsocial ties outside the family.

Those who work at home may also be limitedin the kind of work they can do and how produc-tive they are by such things as the amount of spaceavailable for work and storage, or whether there iselectricity and water supply. In Ahmedabad City,India, poor women who live in dilapidated shelterson the streets report that no one is willing to givethem piece-rated garment work because of thepoor conditions of their homes and lack of cleanstorage space. In spite of having the necessarysewing skills, they have resorted to work as casu-al labourers or waste pickers (Unni and Rani 2002;Lund and Unni, n.d.).

Finally, home-based workers may work withtoxic substances, putting children especially atrisk. They may be unable to read warnings aboutsafe handling and storage, or their homes may notbe equipped for proper storage or ventilation. In

the case of industrial subcontracting, this is onevery concrete way in which some firms shift risk toworkers and their families.

Public places – Streets, sidewalks and trafficintersections are the place of work for manytraders, along with parks, fairgrounds and munici-pal markets. The same public spot may be used fordifferent purposes at different times of day: in themornings and afternoons it might be used to tradeconsumer goods such as cosmetics, while in theevenings it converts to a sidewalk café run as asmall family enterprise.

Despite exposure to pollution, noise andweather, the benefit of working in public spaces isevidenced by the demand for them. In the com-petitive jostle for sites close to transport and com-muter nodes, city authorities respond in differentways, ranging from outright prohibition of streettrade to regulated and negotiated use.Harassment, confiscation of goods, imposition offines, physical assault and time spent in court – allof these affect the bottom line for traders. Giventhese costs of operating informally, some tradersmay wish to pay site licenses and other levies, butoften the costs of regulation in both time andmoney are too high in relation to the tiny size oftheir enterprises and incomes.

Other open spaces – Other common placesof work are agricultural land, including pasturesand forests, and fishing areas, including ponds,rivers and oceans. Construction sites are not onlyplaces of work for construction workers but alsofor suppliers and transporters of materials, andthese sites may attract other informal providers ofgoods and services – such as street food vendors– while building is taking place.

In many countries, there is a marked genderpattern to the place of work. A recent random-sample survey of both formal and informal workersin Ahmedabad City, India found that less than 25per cent of the female workforce worked in facto-ries, offices or shops compared to nearly 60 percent of the male workforce, while nearly 70 percent of the female workforce worked in their ownor other homes, compared to less than 10 per centof the male workforce (Unni 2000).

Employment relationshipThe employment relationship is the central legalconcept around which labour laws and collectivebargaining agreements recognize and protect therights of workers. The conventional notion of thisrelationship, thought to be universal, is thatbetween a person, called the employee (frequentlyreferred to as ‘the worker’), with another person,

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1 This discussion is focused on those who work in their own homes. Those who work in other people’s homes include paid domesticworkers and nurse assistants (mostly female), security guards and gardeners (mostly male), as well as better-paid professionals suchas book-keepers who work for home-based consultants.

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called the employer, to whom she or he provideslabour or services under certain conditions inreturn for remuneration” (ILO 2005a, 2003b).2 Thisexcludes those workers who are self-employedalong with many kinds of wage employment inwhich the employer-employee relationship is dis-guised, ambiguous or not clearly defined.

In some cases, employers disguise theemployment relationship by giving it the appear-ance of a commercial relationship: e.g., whenemployers ‘sell’ raw materials to sub-contractedworkers who ‘sell’ finished goods back to them. Inother cases, the relationship may be genuinelyambiguous. For example, some wage workerswork at a physical distance from the enterprise thatemploys them while using equipment and/or rawmaterials provided by the enterprise, following itsinstructions and being subject to its control (overquality of goods produced and method of pay-ment) but having full autonomy as to how to organ-ize the work. And some ostensibly self-employedworkers may be dependent on one or more con-tractors, including taxi-drivers, newspaper distribu-tion workers and skilled homeworkers using infor-mation communication technology. In cases wherethe employees of one enterprise provide servicesor labour to another enterprise, it is unclear whothe employer is, what rights the worker has andwho is responsible for securing these rights. Theclassic example in developed countries is the tem-porary worker who gets work through a tempagency (ILO 2003b).

The main categories of informal employmentrelations are as follows:

� employers: owner operators of informal enter-prises who hire others;

� own account workers: owner operators of sin-gle-person units or family businesses or farmswho do not hire others;

� unpaid contributing family workers: family work-ers who work in family businesses or farms with-out pay;

� employees: unprotected employees with aknown employer: either an informal enterprise, a formal enterprise, a contracting agency or ahousehold;

� casual labourers: wage workers with no fixedemployer who sell their labour on a daily or sea-sonal basis;

� industrial outworkers: sub-contracted workerswho produce from their homes or a small work-shop.3

Workers within each of these categories can be more or less dependent or independent,

depending on the specific contractual arrange-ment under which they work. Self-employmentranges from fully-dependent arrangements inwhich the owner operator controls the processand outcomes of work and absorbs the risks, to semi-dependent arrangements in which the operator does not control the entire processor outcome of her work but may still absorb all of the risks involved. And, as noted earlier,some self-employed persons are dependent onone or two clients or on a dominant counterpart.Also, wage employment ranges from fully-dependent employees to fairly independentcasual labourers.

Industrial outworkers who work from theirhomes are neither self-employed nor wage-employed. They work under sub-contracts for apiece rate without secure contracts or any real bar-gaining power. The small amount and insecurity oftheir income is exacerbated by the fact that theyhave to pay for the non-wage costs of production,such as workplace, equipment and utilities. Theyhave little control over the volume or timing of workorders, the quality of raw material supplied to themor when they are paid. Some industrial outworkersproduce goods for major firms abroad. In today’sglobal economy, there may be no greater distance– physical and psychological – or greater imbal-ance in terms of power, profit and life-style thanthat between the woman who stitches garments orsoccer balls from her home in Pakistan for a brand-name retailer in Europe or North America and thechief executive officer (CEO) of that brand-namecorporation.

In sum, most informal workers do not fitneatly under the employer-employee relationshipas conventionally understood and, therefore,tend to be excluded from legal and social pro-tection as well as from collective bargainingagreements. In devising responses, the problemneeds to be correctly diagnosed: is the scope ofthe legislation too narrow to cover all workers, oris legislation applicable to them not beingenforced? (Daza 2005). But to fully understandthe nature of informal work today, it is also impor-tant to look beyond employment relationships tothe underlying system of production andexchange (du Toit and Ewert 2002).4

System of productionIn most developing economies today, a complexmix of traditional, industrial and global modes ofproduction and exchange co-exist as parallel orlinked systems. In many developing countries, arti-sanal and agricultural modes of production have

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2 In 2006, the government, employer and worker delegates to the International Labour Conference will consider a draft Recommendationon the Employment Relationship encouraging states to adopt legal reforms aimed at closing the protection gap (ILO 2005a).

3 In labour force statistics, there is another category: paid contributing members of cooperatives. 4 A single conceptual framework is needed for labour statistics, labour law and labour economics that covers all categories of non-stan-

dard employment in developed countries, all categories of informal employment in developing countries and all categories of employ-ment (however defined) in transition economies.

not changed significantly over the past century,and industrialization has not expanded as rapidlyor as fully as in developed countries. Self-employ-ment remains a large share of total employmentand industrial production takes place in micro andsmall units, in family businesses or in single personunits. Smaller units tend to hire workers on a casu-al or semi-permanent basis with limited job securi-ty or workers benefits, no job ladders, and few (ifany) labour-management negotiations. Even inlarger units, employment relationships may beunstable and unprotected by labour legislation orcollective bargaining agreements. And, in labour-intensive manufacturing sectors from garmentsand footwear to electronic and automobile parts,production is often sub-contracted to microenter-prises or to industrial outworkers.

The global system of production – facilitatedby digital technologies – involves dispersed pro-duction coordinated through networks or chains offirms. Authority and power tend to get concentrat-ed in the top links of value chains or diffusedacross firms in complex networks, making it diffi-cult for micro-entrepreneurs to gain access, com-pete and bargain and for wage workers to bargainfor better wages and working conditions. Highlycompetitive conditions among small-scale suppli-ers and the significant market power of transna-tional corporations mean that the lion’s share of thevalue produced across these value chains is cap-tured by the most powerful players. Some smalland microentrepreneurs become suppliers in thesechains or networks, others become subcontrac-tors or subcontracted workers, while yet otherslose out all together.

In developing countries, globalization hasbeen associated with two modes of productionthat provide little if any job security or legal protec-tion to workers: centralized production in largefactories or workshops in export-processingzones; and dispersed production across a longchain of suppliers, contractors and industrial out-workers in global value chains.5 Export processingzones (EPZs) are industrial enclaves of export-ori-ented factories set up by many developing coun-tries to attract foreign investors and increaseexports. In other countries, such as Mauritius, EPZincentives and protections have simply beenextended to designated export-oriented firms irre-spective of their physical location. In a few coun-tries, the EPZ package of incentives and protec-tions still includes exemption from national labourlegislation (ILO 2002d). In global value chains, leadforeign firms negotiate directly with the first-tier oftheir suppliers, while retaining power and controlwithin the chain and excluding those down thechain from direct negotiations and associated ben-

efits. The first-tier of their suppliers may, in turn, beexempt from or choose to ignore national legisla-tion (Chen et al. 2004).

Of course, EPZs and global value chains arenot mutually exclusive ways to organize global pro-duction. EPZ factories are part of global commod-ity chains, though they are governed not only bythe lead or parent companies to which they supplygoods but also by the government regulations cov-ering the EPZ where they are located. In bothcases, there is a marked shift from intra-firm(employer-employee) relationships that predomi-nate in industrial production. In the case of EPZsthe shift is to firm-government relationships, and inthe case of value chains it is to inter-firm relation-ships. As a consequence, many wage workershave little control or bargaining power over theirterms of involvement (ibid). A widespread featureof global production is the volatility and seasonali-ty of demand. To adjust to the peaks and sloughsin their business cycle, many employers prefer tohire a small core workforce and maintain a ‘reservearmy’ of seasonally employed workers. In addition,wage workers in EPZs are often not allowed to joinunions, and many sub-contracted workers in glob-al value chains work from their homes, therebyundermining the socialization and solidarity func-tions of work.

What this complex reality suggests is that thecosts and benefits of informal work are a functionnot just of working conditions but, more funda-mentally, of work arrangements. As used here,‘working conditions’ is a term associated withwhether the workplace is safe or humanely-runand whether the workers enjoy benefits and legalprotection; and ‘work arrangements’ is a broaderterm that encompasses place of work, employ-ment status and production system – each ofwhich serves to determine the conditions and out-comes of work. Making the link between informalemployment, poverty and gender inequality meansassessing the costs and benefits associated withdifferent informal work arrangements against thelocation of women and men within them.

Benefits of Informal WorkThe most widely cited benefits of informal workinclude tax avoidance, illegal occupation of prem-ises and illegal tapping of electricity, all of which areseen to lower the costs of informal enterprises andto give them a competitive advantage over formalfirms that pay taxes, rent and utility bills. A secondset of benefits, thought to favour women in partic-ular, are the flexibility of work hours and the con-venience of working from home or another con-venient location. A further derived benefit is theopportunity that might not otherwise be available

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5 See Gereffi 1994 for a discussion of two types of global value chains: buyer-driven chains (e.g., garments) and producer-driven chains(e.g., automobiles).

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for generating wealth (if a person is entrepreneurial)or for making ends meet (if a person is poor). Andfor those who might not be able to seek a formaljob, such as women whose physical mobility isconstrained by social norms, informal work is seento offer a chance to earn an independent income.

Tax avoidance and competitive advantageInformal entrepreneurs are thought to avoid thevarious taxes paid by formal enterprises, includingregistration fees, corporate income tax and payrolltaxes. However, the reality is not so straightfor-ward. Although informal enterprises are not formal-ly registered at the national level, they may be reg-istered at a local municipal level and pay registra-tion fees as well as operating fees for the use ofurban space. Moreover, they often pay indirecttaxes or fees in the form of bribes, fees to recoverconfiscated goods and relocation costs in cases ofeviction. Street vendors are particularly liable toindirect taxes. Some also pay nearby storekeepersfor the use of toilets or space to store goods.

With regard to corporate income taxes, manymicroenterprises and own account operators arenot subject to these since they are not incorporat-ed or do not generate enough profit to fall intoexisting corporate tax brackets. However, theymay still pay taxes because of reporting businessprofits as personal income due to the difficulty ofseparating household and business accounts. Onthe other hand, microenterprises and own accountunits do not benefit when governments lower cor-porate income tax rates as part of export-promo-tion incentive packages. There is no parallel taxincentive for microenterprises or own accountoperators that are not incorporated.

With regard to payroll taxes, microenterprisesthat hire others are legally liable to submit thesebut, by not registering, often avoid them.However, own account operators, who representa large share of informal enterprises in manydeveloping countries, are not subject to payrolltaxes as they do not (by definition) hire workers.In India, own account operations represent over85 per cent of all informal enterprises in manufac-turing (Unni 2005).

Finally, with regard to value-added taxes,informal producers and traders often find it difficultto ‘pass’ these on to their customers because theyoperate in such highly competitive and price-sen-sitive markets. And they cannot claim back the VATthat they pay on inputs because they are not legal-ly registered. Further, a flat rate value-added tax –especially on foodstuffs – can prove regressive forinformal workers as consumers. This is becauselow-income households spend a larger proportionof their income on food than higher-income house-holds and, as we saw in Chapter 3, informal work-ers are more likely to be from poor householdsthan are formal workers.

In 2004, the World Bank extended itsInvestment Climate Surveys in 11 countries tocover micro and informal firms. These extendedsurveys found that, compared to all sizes of formalfirms (small, medium and large), informal firms:

� pay relatively high bribes (using bribe paymentsas a share of sales as the measure);

� have less access to formal finance;� experience more frequent electricity outages;� find government services less efficient.

The surveys also found that non-compliance withtaxes and regulations leaves informal firms vulner-able to being evicted or shut down, and makesthem easy targets for bribes or bureaucraticharassment from officials (Hallward-Driemeier andStone 2004).

Flexibility and convenience Some forms of informal work are associated withflexible work hours and other forms of conveniencesuch as working at or near one’s own home. And,undoubtedly, some women ‘prefer’ flexible workhours and working from home due to competingtime pressures owing to their responsibility for bothpaid and unpaid work. But other women have littlechoice, are conditioned to prefer or are forced intothese arrangements. The flip-side of flexibility isuncertainty, including uncertain volume and qualityof production due to flexible work schedules andpoor working conditions; and uncertain workorders and payments due to limited market knowl-edge and bargaining power. This applies in partic-ular to the many home-based producers who areindustrial outworkers – also known as homework-ers (see section on industrial outworkers below).

Industrial outworkers are completely depend-ent on others for the supply of raw materials andthe sale of finished goods and remain isolated fromother women doing the same type of work. Thisdependence, combined with the isolation thatmakes organizing with others difficult if not impos-sible, undermines their ability to bargain for higherpiece-rates, timely payments or overtime pay.Finally, working at home can represent a cost interms of bargaining power not just in the marketbut within the household, because it does not pro-vide women with a viable fall-back position.

Costs of Informal WorkWhile informal work does offer positive opportuni-ties and benefits, the benefits are not sufficient andthe costs are often too high for most of those whowork informally to achieve an adequate standard ofliving over their working lives (see Box 4.1). Somecosts are direct in the form of ‘out of pocket’expenses needed to run an informal business orwork informally; others are indirect, reflecting themore general conditions under which the workingpoor live and work. Some of these can be ratherhigh over the long-term, such as when a worker

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has to sacrifice access to health and education (ortraining) for herself or family members. Also, thereare psychological and emotional costs – in terms ofa worker’s self-esteem and dignity – associatedwith many forms of informal work.

Many informal workers face significant occu-pational hazards in the workplace (direct costs) yetare not covered by occupational health and safety(OHS) regulatory and compensatory mechanisms(indirect costs). For unprotected informal workers,exposure to toxic chemicals, repetitive strain andmuscular-skeletal injuries, poor sanitation, exces-sive working hours and structurally unsafe work-places not only threaten personal health and safe-ty but can also impact on productivity and income(see Box 4.2).

Existing OHS regulatory mechanisms aregenerally under-resourced and unable to keeppace with the diversifying nature of work today.Mainstream enforcement mechanisms rely oneasily identifiable employers and workplaces and,therefore, exclude many informal workers who donot have a standard employment relationship orconventional work space. In many countries,enterprises with fewer than a specified number ofworkers may be excluded from OSH legislation.Other forms of vulnerability – such as the imper-

manence and insecurity of the workplace or theneed to work excessive hours on piece-rate con-tracts – may further contribute to the risk of injuryand illness for informal workers yet remain unchal-lenged by existing regulatory systems.

In addition to the costs of working informal-ly, informal workers often have to forego the ben-efits associated with working formally and beinglegally recognized by the state. Formal enterpris-es are more likely to have access to financialresources and market information, and to be ableto secure written and enforceable commercialcontracts. Formal entrepreneurs are entitled tojoin registered business associations throughwhich they gain information about market trendsand forge market contacts.

In addition, depending on the country, thestate may contribute to unemployment funds,workers’ compensation, maternity benefits, healthinsurance and retirement savings, all of which areforms of risk management and means of smooth-ing incomes over a lifetime.

In some countries, the state also sets uplabour courts or other machinery for settling dis-putes between employers and employees inways that enable workers to confront employerson a more equal footing. Finally, to promoteexports and competitiveness in specific sectors,the state may offer subsidies and incentives tobusinesses, including tax rebates, businesstraining, export licenses, export promotionthrough trade fairs, outright subsidies (e.g., agri-culture) and other means.6

In addition, some states make provisions thatare not based on employment but that, nonethe-less, impact on the ability of men and women towork. For example:

� in many European countries, state commitmentto child care provision directly encourageswomen to go to and stay in work;

� in Durban, South Africa, a municipal water tariff –the ‘lifeline tariff’ – charges lower rates to low-income consumers; poor people who work fromhome who depend on water for work, such ascooking for sale at local outlets and doing laun-dry, pay less for their water, thus benefiting asworkers as well as consumers;

� in Thailand, a local community developmentfund gives local groups access to loans at lowrates of interest for income-generating initiatives.

Finally, as citizens, both formal and informalworkers are entitled to benefits from the state thatcan directly and indirectly contribute to their abilityto work productively: for example, health, educa-tion and welfare services, infrastructure for resi-dential areas and support for care of elderly peo-

6 The informal workforce receives few – if any – of these employment-related benefits, at least in their capacity as workers. However, asdependents of a formally-employed spouse or father, many women (whether working or not) and children receive benefits such ashealth insurance and widows’ pensions – providing the formal work includes social protection, which is less and less common.

Costs of Informal WorkDirect Costs 1. High costs of running informal businesses, including direct and

indirect taxes2. High costs of informal wage work

• long hours and unscheduled overtime• occupational health hazards

3. High costs of accessing capital in informal financial markets and high indebtedness

4. High costs associated with periodic ‘shocks’ to work

Indirect Costs1. Lack of secure work and income

• greater insecurity of work • variability and volatility of income

2. Lack of worker benefits and social protection• few (if any) rights such as paid sick leave, overtime

compensation or severance pay• no childcare provisions • little (if any) employment-based social protection • no health, disability, property, unemployment or life insurance

3. Lack of training and career prospects4. Lack of capital and other assets

• lack of/vulnerability of productive assets • limited (if any) access to formal financial services

5. Lack of legal status, organization and voice • uncertain legal status • lack of organization and voice

Box 4.1Box 4.1

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ple, children and people with disabilities. However,in many countries, there are systematic biasesagainst poorer people either in accessing state-provided services such as health and education orin the quality of those services.

What we can see from this review is that someof the costs of informal work are associated withthe behaviour of individual firms, others with gov-ernment policies and still others with social normsand institutions. Firms often decide the nature ofemployment and commercial contracts, the costsof employment or commercial transactions and the‘rules-of-the-game’. An example is retailers in thefood and garment industries who, through sourc-ing and purchasing practices, “demand low-cost,fast, and flexible production in their supply chains”(Kidder and Raworth 2004:12).

Government policies often fail to generateaggregate demand for the labour, goods and serv-ices provided by the informal economy or to pro-vide legal and regulatory protections to informalfirms and workers. Finally, social norms and insti-tutions (family, kin and caste) constrain the physi-cal mobility of individual workers as well theiraccess to and ownership of property.

In brief, competitive market pressures andrelated corporate practices, a decline in statesocial spending and legal protections and variousforms of discrimination in the broader society – byclass, gender, race/ethnicity and geography – rein-force each other to generate significant costs forthe working poor in the informal economy.

Together these costs take a huge toll on thefinancial, physical and psychological well-being ofmany informal workers, eroding the benefitsearned through employment. In the short term, theworking poor in the informal economy often haveto ‘over-work’ to cover these costs and still makeends meet. In the long-term, the cumulative toll ofbeing over-worked, under-compensated andunder-protected on informal workers, their familiesand their societies undermines human capital anddepletes physical capital.7 All these costs, bothdirect and indirect – as well as foregone benefits –must be addressed if the poor are to able to worktheir way out of poverty.

Exposure to riskHow does gender intersect with types of work indetermining the risks and insecurities associatedwith work? A recent UNIFEM-supported study ofwomen in the informal economy in Bulgaria askedwomen informal workers (through interviews andfocus-group discussions) to assess the risks thatthey face. As ranked by respondents, the greatestrisks were becoming impoverished upon retiringfrom work and the intergenerational transfer ofpoverty: respondents explained that they could not

afford to bring up their children properly and wouldhave to rely on their children to supplement theirmeagre social pensions when they retired (Dimovaand Radeva 2004).

A UNIFEM-supported study of home-basedworkers in poor urban communities in Bolivia andEcuador developed an index of informality (high,medium, low) based on the regularity and stability ofemployment. Among economically-active personsin their sample, 95 per cent in Bolivia and 79 percent in Ecuador were in a main occupation that wasmoderately or highly informal. In both countries,women were more likely than men to be in the mostinformal employment (Benería and Floro 2004).

This issue was also explored in a recent studyin a black township in KwaZulu Natal province,South Africa. Classifying wage workers into mostformal, semi-formal and most informal, the study

Occupational Health and Safety Hazards

Problems associated with poor health and safety in the workplace

vary from job to job and are also heavily dependent on the environ-

ment in which each job is undertaken. Some of the common prob-

lems associated with different types of informal work include:

1. Garment makers

• neck and back ache

• pain in limbs and joints

• poor vision resulting from eye strain

• headaches, dizziness and fatigue

• respiratory problems associated with dust and textile fibres

2. Street vendors

• exposure to weather – extreme temperatures, wind, rain and sun

• poor access to clean water

• poor sanitation from dirty streets and poor drainage, as well as

waste produce from other vendors

• diseases transmitted by vermin

• lead poisoning and respiratory problems from vehicle fumes

• musculoskeletal problems associated with ergonomic hazards at

workstations and static postures

• risk of physical harm from municipal authorities, members of the

public or other traders

3. Waste pickers

• exposure to weather – extreme temperatures, wind, rain and sun

• poor sanitation and limited or no access to clean water

• exposure to dangerous domestic and industrial waste, including

toxic substances such as lead and asbestos

• exposure to other dangerous matter, including blood, faecal

matter, broken glass, needles, sharp metal objects and animal

carcasses

• back and limb pain, itchy skin/rashes

• diseases transmitted by vermin, flies and mosquitoes

• specific high risk of tuberculosis, bronchitis, asthma,

pneumonia, dysentery and parasites

Box 4.2

7 In a recent paper on the hidden costs of ‘precarious’ employment to women workers, Kidder and Raworth (2004) present a frameworkfor estimating the long-term costs to society of this work.

found that while income levels in general were verylow, the median income for the self-employed wasaround half that for wage workers. However, therewere stark differences among wage workers, withthe most informal wage workers having a medianincome well below that of the self-employed.Controlling for age, education and experience,women earned significantly less than men. Theaverage wage gap was estimated to be around 48per cent; the gender difference was smallest, how-ever, for those in professional ranks (teachers andnurses) in the civil service (see discussion on pub-lic sector employment and earnings in Chapter 3).

The study also showed clear differences withregard to risk. Among the self-employed, less than

a quarter received a regular income, as opposed tothree quarters of wage workers. The conse-quences of this in terms of health were seen in thefact that nearly three times as many self-employedworkers reported poor health status as wage work-ers. Moreover, fewer of the self-employed than ofthe wage workers had work-related insurance thatcould help tide them over hard times.

Among the wage employed, those who arepaid in cash rather than through a bank account orpost office also face risk, including the possibility oftheft, claims on cash income by relatives or friendsand ease of spending (rather than saving) earnedincome. None of the most formal wage workerswere paid in cash, compared to nearly two thirds ofthe most informal wage workers (Lund andArdington 2005).

Irregularity and seasonality of work What people earn is a function not just of their levelof earnings but also of the period of time overwhich these earnings are sustained. For example,findings from a random-sample survey of 104 menand 507 women in low-income slums inAhmedabad City, India suggest, as might beexpected, that formal salaried workers enjoy themost days work per year on average. Within theinformal workforce, the self-employed enjoy moredays of work per year on average than do casualday labourers or homeworkers.

However, these averages disguise markedgender differences in unemployment. Within eachemployment status category, women reportedfewer days of work and more days of unemploy-ment per year than men. Overall, women averaged124 days of unemployment per year while menaveraged only 74 days of unemployment per year.Also, fewer women (83%) than men (92%) report-ed that their main activity was regular and morethan twice as many women (37%) as men (15%)reported that they carried out two economic activ-ities per day (rather than one) (Rani and Unni 2000).

Seasonality helps explain some of the reportedunemployment and irregularity of work. InAhmedabad City, there are marked seasonal fluctu-ations in the supply and price of different varietiesof fruits, vegetables and other fresh produce thatstreet vendors purchase and sell. Also, the demandfor fruits and vegetables rises in summer, falls dur-ing the monsoon and winter months and peaksduring the major festivals and the wedding season.Similarly, the demand for garments typically falls insummer, rises in winter and peaks just before (anddrops sharply after) the major annual festivals andthe wedding season. During the monsoon season,the lack of sun and dry spells disrupts many occu-pations in which both men and women areengaged (construction, screen printing, cloth dye-ing, laundry services) as well as those in whichwomen are concentrated (pepper or spice drying,incense stick rolling) (Chen and Snodgrass 2001).

Woman selling fish in outdoor market, Kisumu, Kenya. Photo: Martha Chen

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Garment Workers Women workers are often considered to be amongthe relative winners of globalization. Many are earn-ing cash incomes for the first time – often more thanthey would elsewhere (Kidder and Raworth 2004).But at the bottom end of global value chains thatsupply fresh produce, garments, shoes or electronicgoods to major retailers or manufacturers, there areoften hidden costs for women resulting from theirwork arrangements.

For example, the garment industry employs mil-lions of women workers across the world.Conditions are fiercely competitive, with rapidchanges in fashion dictating a severe form of just-in-time production, the consequences of which are wellknown – low wages, long hours of overtime and anincrease in the numbers of industrial outworkers,most of whom are women. The ending of the Multi-Fibre Agreement in January 2005 has introduced fur-ther volatility to a complex and rapidly changingindustry. The case studies that follow illustrate acontinuum of locations and statuses within the gar-ment industry drawn from different countries. Theseinclude factory work, contracted or agency workwithin factories, work as a member of a producergroup and homework.

Factory Workers in China. In 1980, a SpecialEconomic Zone (SEZ) was set up in Shenzhen, justacross the then border from Hong Kong. At the time,Shenzhen was a small city with around 300,000inhabitants and fewer than 30,000 recognized work-ers. By the end of 2000, its total population hadincreased to over 4.3 million and its labour force toover 3 million. Only 30 per cent of the population iscategorized as permanent residents. The other 70per cent – mainly migrant labourers from rural areas– are classified as temporary residents, a status thatuntil recently has meant that they do not have theofficial household registration that would entitle themto citizenship in Shenzhen (Ngai 2005).

Garment, electronics and toy-making plantspredominate in the SEZ. Designed to attract localand foreign investment, the incentive packageoffered by the SEZ includes low taxes, low manage-ment fees and low rents for large factory com-pounds. In these light manufacturing industries,more than 70 per cent of the total labour force isfemale and young (usually under 25 years of age). Allof the women workers are classified as rural peasantworkers (mingong) and do not have the status of for-mal workers. Because they lack citizenship rightsand the cost of rent is high, workers mainly live indormitories provided by their employers. A recentstudy assessed the set of factors that situate theseworkers in an especially precarious position: thepractices of international buyers that do not serious-ly apply corporate ‘codes of conduct’ to worker con-ditions in their supplier companies; national and

provincial Chinese laws that do not provide basiccitizenship rights for non-resident rural migrantworkers; and the ready supply of willing femaleworkers who are eager to earn in the years of rela-tive ‘freedom’ before marriage (ibid.).

With accommodation tied to employment,employers in this ‘dormitory labour regime’ havecontrol over both the working and living conditionsof their employees. Most workers, except manage-ment staff, are paid on a piece-rate basis, obligingthem to work long hours to produce sufficient quan-tities to earn good wages. In addition, while workersare entitled to an overtime premium for work donebeyond normal hours (40 hours a week), companiestake advantage of the fact that workers do not knowthe terms of Chinese labour law to insist that workdone on weekends is not overtime and that workershave no right to refuse to take overtime work.Twelve-hour working days are not uncommon. Restdays are provided only if there is a break in produc-tion orders.

To restrict the movements of their migrant work-ers, companies often keep their identity cards andenforce a system whereby newly hired workers arerequired to deposit RMB 100 with the company.They also exercise strict discipline and supervisionin the dormitories – many of which are crowded,lack sufficient ventilation and lighting, and provideno private or personal space. In 2005, labour short-ages were reported in several SEZs in China, sug-gesting that the supposedly endless pool of womenworkers willing to work in these zones was drying up(Pun Ngai, personal communication, 2005).

Factory Workers in Bangladesh. In Bangladesh,the export-oriented garment industry in 2000 provid-ed jobs to 1.8 million workers of which 1.5 millionwere women (Kabeer and Mahmud 2004). But thejobs lack social protection, conditions in many of thefactories are below international standards andwage levels are generally lower than those in therest of the domestic manufacturing sector, that is,informal. This is due both to the presence of a largereserve pool of unskilled female labour in the coun-tryside willing to work for low wages in the garmentfactories (one of the few modern employmentopportunities open to them) and to the absence ofcollective bargaining or other mechanisms forenforcing the national minimum wage and otherlabour protections (Bhattacharya and Rahman 2002).

Many of the garment workers work overtime. In2003, local researchers calculated that womenworkers in seven garment factories in Dhaka, thecapital city of Bangladesh, worked an average of 80hours overtime per month and that their overtimepay was around 60-80 per cent of what they weredue. This under-payment was estimated to be theequivalent of 24 hours of uncompensated work permonth. In addition, the women workers faced out-

Close-up: Occupational Groups

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05of-pocket expenses when forced to work overtimeat night. Whereas they could walk home in daylighthours, they had to pay transport costs at night thatadded up to the equivalent of an additional 17 hoursof uncompensated work per month (Barkat et al.2003, cited in Oxfam International 2004). While thewomen workers knew that they were being under-paid for their overtime, they had not received writtenpay slips and were not aware of the extent of theirunder-payment.

Agency Workers in Thailand. In Thailand, a firmcalled GFB operates in Bangkok producing garmentsfor export (e.g., for Liz Claiborne, Victoria’s Secret,Playtex). In 2001 it employed about 1,500 workers, ofwhich nearly all were women. Some were paid on amonthly basis and some on a daily basis. A localunion successfully negotiated to obtain cost of livingincreases, transport allowances and bonuses forworkers, as well as financial support from the firm tothe union. However, changing conditions in theindustry simultaneously led to substantial layoffs andgreat insecurity among all workers.

GFB called on the services of an employmentagency called BVS to supply labour on short-termcontracts. Workers applying for employment (someof whom were laid-off formal workers) now had acontract with BVS, which stipulated payment of thelegal minimum wage and of overtime. At the sametime, it omitted a range of benefits that normallyaccrued to formal workers, such as annual wageincrease, survivor benefit, cost of living allowanceand food allowance (Doane et al. 2003).

Specific and less visible costs of the move tocontract-based work included the need for workersto buy their own uniforms, and the demand, totallyagainst Thai law, that they place a deposit worthabout six days’ wages into a ‘guarantee fund’, whichis repaid in full only if the worker stays for sixmonths or more. Agency workers are prohibitedfrom joining a union, one of the core labour stan-dards of the ILO. Finally, although agency workerspay contributions to the Thai social insurance fund,these are sometimes not forwarded to the SocialSecurity Office, resulting in denial of benefits withoutrecourse through the labour court, which in anyevent is both expensive and time consuming.

Group-Based Industrial Outwork in Thailand. Inanother part of Thailand, Lampoon province, a groupof 10 women produce garments for the local andexport markets, working from the private house ofthe lead member. They work on a piece-rate basisfor less than they could earn if they worked in thenearby factory, and they have to cover the cost intime and transport of securing orders from the firm.These industrial outworkers, all women, are quiteclear about the benefits to them of this poorly-paidgroup work. Flexible time allows them to participatein village activities; additionally, no garment produc-tion is done during the farming season, when they

all have farm responsibilities. Their working collec-tively has enabled them to co-invest in their ownwork-based fund for equipment. It also enablesthem to access loans for their machines from localgovernment, access assistance from the health serv-ices for training on occupational health and safetyand contribute to the Thai social insurance fund.

Though these workers are paid less than theagency workers in the factory, in some respects theirsocial relationships and working environment are farbetter, and they are able to combine different kindsof domestic and income-earning activities. This caserepresents a variation on industrial outwork that isdone as a group rather than as isolated individualsat home and seems to suit the needs of thesewomen workers. There appear to be material andsocial benefits to working collectively. This group-based industrial outwork seems quite prevalent inThailand in the garment sector.

Individual Industrial Outworkers orHomeworkers. Industrial outworkers who work fromtheir homes fall into a grey intermediate zonebetween being fully independent and being fullydependent. In the garment industry, the percentageof homeworkers in the total workforce in the mid-1990s was estimated at 38 per cent in Thailand,between 25-39 per cent in the Philippines, 30 percent in one region of Mexico, between 30-60 percent in Chile and 45 per cent in Venezuela (Chen etal. 1999). Homeworkers work under what could beconsidered either an employment or a commercialcontract for a sub-contracting firm or its intermedi-ary. While the firm or its intermediary typically sup-plies work orders, designs and raw materials andmarkets the finished goods, the homeworker pro-vides the means of production and the workplace.

The homeworkers also have to absorb many pro-duction costs – including utilities as well as the main-tenance and depreciation of equipment – and associ-ated risks, often without help from the firm/intermedi-ary. For instance, garment homeworkers commonlyhave to buy and maintain their own sewing machines,replace needles and thread and pay for the electricityto run their machines and light their workspace.Although not directly supervised by those who con-tract work to them, they are subject to delivery dead-lines and to quality control of the products they deliv-er. If their work orders are suddenly cancelled, if thefirm/intermediary does not accept their goods or ifthey are not paid for months at a time, homeworkershave little recourse. This is because they operate in alegal limbo in which it is not clear whether they areemployees and, if so, which firm or individual in thesub-contracting chain is their employer.

Street Traders Street Traders in Nairobi, Kenya. An estimated15,000 street traders compete for space and cus-tomers in the Central Business District (CBD) ofNairobi, the capital city of Kenya. They sell a range

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of goods, from vegetables and fruits to electricalequipments and accessories, and provide servicessuch as shoe shining, catering and selling of drinks,and art or design services such as designing rubberstamps. The gender divide is marked in the type ofgoods being sold and services offered: women tendto dominate in the less lucrative trading activitiessuch as the sale of fruits and vegetables, while mendominate in the sale of higher-value non-perishablegoods such as electrical equipment and acces-sories. Trade in old clothes (mitumba), which is com-paratively lucrative, attracts both women and men,though men tend to have a higher volume of stock.The gender divide in type of goods being sold andvolume of stock is partly explained by the differentiallevel of access to capital and economic networks bywomen and men. Most men who sell electricalequipment either sell on commission or have someform of credit arrangement with their suppliers.

Vendors use different structures including handcarts and different materials for displaying theirgoods. The materials include cardboards, cartonboxes, gunny bags, shawls, plastic sheets andclothes hangers, which allow street vendors toquickly and easily conceal their commodities when-ever the city enforcement officers are sighted. Mostvendors operate on open grounds without any pro-tective covering, while a few others have makeshiftcovers using polythene, canvas, corrugated ironsheets and carton sheets, which are not allowed bythe city authorities. The vendors operating withoutany cover or shelter are exposed to harsh weatherconditions – sun, rain and dust. This affects not onlythe traders’ health but also the conditions of thegoods they sell.

The income or value of sales of street vendorsvaries according to what they sell. Those who sellelectronic goods and accessories earn more thanthose who sell fruits and vegetables. Most traderspurchase their goods on a daily cash basis; mosthave no access to formal credit and have to borrowfrom relatives and friends, join Revolving Savingsand Credit Associations (ROSCAs), draw-down per-sonal savings or sell property.

In Kenya, the use of urban public space is regu-lated by municipal by-laws or regulations that areoutdated or are frequently changed. Until recently,there was no designated area for street trade withinthe CBD of Nairobi. Street vendors had to competefor trading space among themselves, with formaltraders and with the municipality to use streets,roads and parking spaces. In 2003, in an effort toaccommodate them within the CBD, the street ven-dors were relocated to back lanes that were nolonger used as loading zones for formal businesses.Most of the lanes were not paved and had no street-lights. Some were used for dumping garbage, whileothers were used as homes for streetchildren orhide-outs for criminals. The move to relocate streetvendors on these lanes was the first initiativetowards an inclusive city that viewed street traders

as part of its economy. But the conditions and repu-tation of the back lanes discouraged the flow of cus-tomers and the lack of lighting reduced the workinghours of the vendors. Also, the available slots couldnot accommodate all of the 15,000 vendors in theCBD (Kiura 2005).

Since 2003, there have been two furtherattempts to relocate street vendors. In 2004, a newMinister for Local Government ordered them tomove out of the back lanes to a five acre piece ofland on the periphery of the CBD. To do this, thepiece of land was cleared and street vendors wereallocated spaces, but without the necessary infra-structure and services such as water, sanitation andsecurity. The vendors refused to move to the newsite and some of them (unsuccessfully) took thegovernment to court. Endless street battles andprotests ensued between the Minister, the municipalauthorities and the traders.

Then, in 2005, the same Minister decided toreserve some streets in the CBD for street trading onSundays; to allocate a parking lot within the CBDfor use by vendors on Saturdays; and to allocate anundeveloped site on the periphery of the CBD foruse on Tuesdays. However, the latter two marketsserve the tourist trade, not the local residents whorely on street vendors for basic household supplies.Although the street vendors have not been fully relo-cated back in the CBD, the local government hasconceded that they need to be accommodated(Winnie Mitullah, personal communication, 2005).

Domestic Workers In most countries, domestic work is predominantly afemale occupation. It is carried out in conditionssimilar to that of wage work, but for private house-holds rather than an enterprise (Pok and Lorenzetti2004). Although typically low-paid and informal, insome contexts domestic workers may be regulatedand protected, that is, formal (Heyzer et al. 1994;Blackett 1998). For example, in 2002, after a 15-yearstruggle, domestic workers in South Africa werefinally brought under the Unemployment InsuranceAct covering employees (see Chapter 6). In manycountries, domestic workers are from migrant com-munities or ethnic minorities. Some of these immi-grants are recruited from overseas specifically to dodomestic work, including some who immigrate withtheir employers to the host country.

Filipina Maids in Hong Kong. Since the 1970s eco-nomic crisis, low wages for even highly educatedworkers and high unemployment have caused manyFilipinas to seek domestic work in Hong Kong andelsewhere in Asia and the Middle East. As ofDecember 1995 there were over 130,000 Filipina‘domestic helpers’ in Hong Kong, most between theages of 20 and 30, with college degrees or highschool diplomas, who had been employed in thePhilippines before migrating and were supporting,on average, five family members via remittances.

The most common complaint among theseworkers is the long and arduous working hours withno overtime pay. A Standard Employment Contractfor Foreign Domestic Workers was put in effect asearly as the 1970s to govern the conditions of work,including the amount of time off and minimum wage(Heyzer and Wee 1994). However, enforcement is aproblem; many workers are underpaid and forced tosign false receipts of payment. Surveys have alsoshown that many workers are required to do addi-tional, and therefore illegal, work outside of theiremployer’s home. Common forms of discipliningworkers range from time-tabling all work activitiesand constant observation to the extension ofemployer control to workers’ private domains –including curfews on days off, control of bankaccounts and identity documents, rules on clothingand appearance and even rules on times and fre-quency of bathing (Constable 1997).

Filipina domestic workers have tried to resistcertain types of employer and government controlthrough political and legal channels, such as helpingto organize the Filipino Migrant Workers’ Union tobargain for rights, as well as engaging in publicdemonstrations or through quieter forms of protest.However, their ability to protect themselves againstexploitative or abusive employers is limited.Although labour rights are guaranteed in the legalsystem, a high failure rate and the financial and per-sonal costs involved in challenging an employer, aswell as the onus on workers to prove their own inno-cence, effectively deters many workers from pursu-ing cases. Further, the balance of power in theemployment relationship lies firmly with employers,given that most domestic workers are financially andemotionally indebted to family and friends for thepayment of high registration and immigration feesand cannot risk the termination of employment andconsequent repatriation. In the pursuit of profitrecruitment agencies further compound the vulnera-bility of workers by encouraging employers to termi-nate contracts after two years (ibid).

Following the Asian economic crisis of the late1990s, the Indonesian Government promoted theemployment of Indonesian women as domesticworkers in Asia. By 2005, there were over 90,000Indonesian domestic workers in Hong Kong, andthe number of Filipina domestic workers haddecreased from a high of close to 150,000 to124,000 in 2005 (Nicole Constable, personal com-munication, 2005).

Waste PickersIn the developed world, most waste removal andrecycling activities are carried out by municipalities.In the developing world, by contrast, these activities

are mainly carried out by private individuals or enter-prises. The only available estimate suggests that, inthe late 1980s, about 1 per cent of the urban popu-lation in the developing world survived by scaveng-ing for waste (Bartone 1988). While those who scav-enge for waste often come from disadvantagedcommunities or are recent migrants to urban areas,and although the work is dirty, demeaning anddemanding, waste pickers play an essential role inhelping to clean cities and to supply raw materials toindustry. And although those who collect and supplywaste to contractors typically earn very little, othersup the recycling chain often earn large amounts ofmoney (Medina 2005).

Waste Pickers in Lucknow City, India . The inter-section of caste, ethnicity and gender can be seenclearly in the case of waste pickers in Lucknow Cityin India. These are mainly migrants from the states ofUttar Pradesh, Bihar or Assam. Regional identity,slum environment and gender are key factors deter-mining the relative vulnerability of waste pickers(Kantor and Nair 2005). All of the waste pickers areextremely vulnerable to injuries, infection and disease(especially skin diseases) given the type of wastethey collect, their exposure to the elements and theirrisky picking and sorting practices – no shoes, nogloves, no hand washing before cooking and childrenplaying among the waste during sorting (ibid.).

Migrants who have lived in Lucknow for a longtime and have established ties fare better than newermigrants. The waste pickers from Assam are theworst-off socially and economically: the local language(Hindi) is not their mother tongue, they are ethnicallydifferent from the other two waste picking groups andthey have fewer local ties. As a result, they are moredependent on subcontractors to provide them with liv-ing space and picking areas. Those who live in olderslums and/or in occupationally-heterogeneous slumshave better access to infrastructure and services.However, they may not be able to take advantage ofthis as they are more likely to face insults and rude-ness from neighbours who do not pick waste, andthey remain isolated and marginalized.

While both women and men pick garbage, morewomen than men sort it, adding to their exposure towaste and related health risks. Mostly men areinvolved in selling the waste. Since they have to movearound different neighbourhoods, women face teasing,touching and other forms of sexual harassment whileout picking. To avoid harassment, they try to pick ingroups, remove girls from picking when they reachadolescence, and limit their mobility. They also limittheir mobility to enable return trips home during theday to cook meals and look after children (PaulaKantor, personal communication, 2005).

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A Causal Model of the InformalEconomyIn examining the costs and benefits of workinginformally, it is important to look not only at gener-ic costs and benefits, but also at which categoriesof informal workers tend to incur the costs or enjoythe benefits and under what circumstances. It isoften the case that formal corporations choose tohire workers under informal employment relationsin the interest of maintaining a flexible and low-costworkforce. In other words, formal firms or employ-ers – not only the ‘informals’ themselves – maychoose informal economic arrangements. Also, thepolicies and regulations of the state as well associal norms and institutions all serve to determinethe costs and benefits of working informally.

With this perspective in mind, we can posit anintegrative causal model of the informal economythat includes informal employment by choice,informal employment by necessity, and informalemployment by tradition. Within this model, thosewho work informally by choice include:

� those who deliberately choose to avoid taxesand registration, such as many micro-entrepre-neurs who hire others;

� those who prefer the flexibility and convenienceof informal work, such as the professional andtechnical self-employed.

Those who operate in the informal economyby necessity include:

� those who cannot find a formal job, as when notenough jobs are created to keep up with thesupply of labour, when retrenchments takeplace, when companies shift their location ofproduction, when mechanization displacesworkers or when companies decide to ‘out-source’ production or services;

� those who do not get sufficient income fromtheir existing job, for example, when poorly-paidpublic sector employees have to earn a supple-mental income in the informal economy to makeends meet;

� those who are forced to change their employ-ment or commercial relationships: for instance,former employees who are re-contracted asseasonal workers; and independent producerswho are forced to work under sub-contractswhen they lose their market niche.

And those who operate in the informalemployment by tradition include:

� those who follow in the hereditary occupation oftheir family or social group, which is passeddown from one generation to the next (such ascaste-specific occupations in India);

� those who receive a ‘calling’ to take up a tradi-tional occupation (such as traditional healers insouthern Africa);

� those who face labour supply constraints due torestrictions on their physical mobility (e.g., due

to patriarchal norms) and/or competingdemands on their time (e.g., due to the genderdivision of labour).

Some of those in the final category could be seenas operating informally due to necessity as well astradition. This is because the constraints they facemight not be due to gender-ascribed roles andresponsibilities but, rather, to wider structuraldimensions of the economy, such as asset owner-ship and gender segmentation of labour markets.Of course, some of these structural constraintsmay also reflect the gender norms of the society.

Poverty, gender and informal employmentWhere the working poor, especially women, arelocated in the global workforce has consequencesfor persistent poverty and gender inequality.Development planners need to look at poverty fromthe perspective of the working poor – especiallywomen – in the informal economy and consider theways in which gender intersects with other sourcesof disadvantage in the realm of work. Finally, main-stream economists and others who advise policymakers need to revisit their assumptions regardinghow labour markets are structured and behave toincorporate the reality of informal employment.

Money matters Increased global attention to poverty has rekindledthe debate on what constitutes poverty. There isrenewed focus on its broader dimensions, which arenot captured in the standard measures of what isnow called ‘income poverty’, including: health, edu-cation, longevity and other human capabilities; polit-ical participation and social inclusion; and humanrights, entitlements and empowerment (Sen 1985,1993; UNDP 1997, 2001; Rodgers et al. 1995). Whileall of these dimensions are critical to the well-beingof the poor, they should not obscure the centrality ofearned income in the lives of the poor.

From the perspective of poor people, moneymatters: both how much cash flows into thehousehold as well as how much cash flows outof the household. As the data presented inChapter 3 indicate, average earnings are higherin the formal than in the informal economy, withthe result that if one or more members of thehousehold is formally employed the total incomeof the household tends to be above the povertyline. And, as the evidence presented in this chap-ter has shown, formal workers are more likelythan informal workers to have secure work andaccess to social protection with the result that ifone or more members of the household is for-mally employed, cash flows out of the householdto cover common contingencies or periodicshocks tend to be relatively low.

From the perspective of poor women whatalso matters is the flow or distribution of incomewithin the household. Who receives the moneywithin the household? Do women control their

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05own earnings? Women’s control over theirincome and their role in the allocation of house-hold budget expenditures are critical to theirempowerment. Women’s bargaining power with-in the household depends in large part on theirearnings and bargaining power outside thehousehold; yet their ability to earn outside thehome depends on gender roles and relationshipswithin the home (see Chapter 2). Women who dopaid work from their homes are not likely, despitetheir earnings, to increase their bargaining powereither outside or within the household. Womenwho do paid work outside their homes and, in theprocess, learn to bargain with wholesale tradersand government officials, are more likely to beable to bargain within the household, whatevertheir level of earnings. Women workers who areorganized are more likely to exercise bargainingpower both within and outside their homes, nomatter where they work or how much they earn(Chen and Snodgrass 2001).

To devise effective strategies for reducingpoverty, development planners need to betterunderstand and measure the costs and benefitsof working informally, taking into account theflows of money into and out of the pockets ofinformal workers or their household budgets. Thatmeans confronting the problems with householdincome and expenditure measures, particularlyhouseholds that depend on irregular wageemployment and/or self-employment. It alsomeans taking into account both out-of-pocketexpenses and lost income associated with ill-nesses, accidents and work stoppages as well asthe monetary and other costs to workers of flexi-ble labour-market policies and business prac-tices. Needed also are measures that capturewomen’s contribution to the household income(e.g., female earnings as a percentage of totalhousehold earnings) as well as women’s accessto and control over income within the household.

Beyond income poverty The consequences of working informally go farbeyond the income – or money metric – dimen-sions of poverty. Compared to those who work inthe formal economy, those who work in the infor-mal economy are likely:

� to have less access to basic infrastructure andsocial services;

� to face greater exposure to common contingen-cies;

� to have less access to the means to addressthese contingencies (e.g., health, property orlife insurance);

� to therefore have lower levels of health, educa-tion and longevity;

� to face greater exclusion from state, marketand political institutions that determine the‘rules of the game’ in these various spheres;

� to have fewer rights and benefits of employment;� to have less access to financial, physical and

other productive assets; � to have less secure property rights over land,

housing or other productive assets.

Many of these deprivations are mutuallyreinforcing. Individuals or families who lacksecure tenure over their home are more likely tolack basic infrastructure such as water, sanitationor electrical connections. Lack of basic infra-structure may compromise their health, which inturn, compromises their ability to work. Yet thosewho survive on their own labour cannot afford tobe sick. The lack of water connections in theirhome means that women have to spend manyhours each day standing in line to draw waterfrom a public tap or fetching water from a villagewell or the nearest water source. For home-based workers, the lack of basic infrastructurecompromises their productivity.

Gender matters The evidence presented here and in the previouschapter highlights the reality that working womenworldwide are concentrated not only in informalemployment but also in the more precariousforms of informal employment:

� women are more likely than men to be ownaccount operators, industrial outworkers andunpaid contributing family members;

� men are more likely than women to be informalentrepreneurs who hire others, employees ofinformal firms and heads of family businesses;

� women are more likely than men to be con-centrated in export-oriented light manufactur-ing, at least in the early stages of trade liberal-ization when a premium is placed on low-skilled and low-paid workers;8

� women are more likely than men to be in streettrade, except in societies that place con-straints on women’s physical mobility, and theyare also more likely to sell from the street(rather than from push carts, bicycles or ashawkers) and to sell perishable goods (ratherthan non-perishables).

As a result, women workers in the informaleconomy face a significant gender gap in earn-ings, arguably greater than that faced by womenworkers in the formal economy. This is largely dueto the fact that women are concentrated in lower-paid work arrangements even within given occu-pations. But even when women and men do sim-ilar kinds of informal work, they often earn differ-

8 In the second generation of trade liberalization, when these activities become more profitable and mechanized, men often take over(see Box 1.1 on the impact of NAFTA on employment in Mexico).

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ent incomes. In part, this reflects differences inthe time that women and men can spend in paidwork. However, studies that control for hours anddays of work, as well as for other factors such aseducation and experience, find that on averagewomen earn less than men within the same typeof work, often due to the perception of women asbeing somehow less skilled or as being able torely on a male breadwinner (Kantor and Nair2005).

While some forms of informal work are saidto have benefits for women, these often reflectgender ascribed roles and responsibilities thatare, in turn, used to justify gender segmentation:notably, the need to balance paid work andunpaid care work. Finally, women are over-repre-sented in forms of informal work that are associ-ated with significant costs, most notably asindustrial outworkers who have to absorb all ofthe non-wage costs of production while enjoyingvery little of the value added.

Intersection of gender and othersources of disadvantage In every country in the world, under every eco-nomic system, women face constraints in therealm of paid work simply because they arewomen: their access to property is typically lessthan that of men and often mediated throughtheir relationship to men; they face greater socialdemands on their time than men do (notably tocarry out unpaid care work); and they facegreater social constraints on their physical mobil-ity than men. But to fully understand the relation-ships between women’s employment and theirpoverty status, we need to integrate an analysisof gender with an analysis of other relationshipsand other sources of disadvantage (ILO 2003c).After all, most working poor women are poor anddisadvantaged not just because of gender rolesand relationships. Class, religion, race/ethnicityand geography all intersect with gender to posi-tion many (though not all) women in precariousforms of work. In most regions of the world, cer-tain communities – differentiated largely by reli-gion, race, ethnicity or geography as well as byclass – are over-represented among the poor:notably, rural communities and religious, racial,or ethnic minorities. In these communities,women are further disadvantaged by reason oftheir gender, but the fact that they are poor anddisadvantaged stems in the first instance from

their wider social identity and/or from where theylive.

Market Failures and MarketInterventionsMainstream economists argue that markets failto achieve socially desirable outcomes whenthere are external costs or benefits, when con-tracts cannot be enforced without costs, wheninformation is not shared or when monopolisticpower exists. Such market failures are endemicin informal labour markets. A strong case can bemade for direct government intervention in infor-mal labour markets to achieve social objectives.But mainstream economists also argue that thecosts of enduring market failures are less thanthe costs of intervening to correct market fail-ures, especially in labour markets.

In assessing whether to accept market fail-ure or intervene in informal labour markets,labour should not be seen as simply an input thatproduces output but rather as a process throughwhich people experience benefits, costs or risks;through which people’s well-being and capaci-ties can be enhanced or depleted; and throughwhich people can be empowered or disempow-ered (Elson 1999). Decent work generates socialbenefits such as social inclusion and coopera-tion, as well as personal benefits that extendbeyond production and the income generated.However, informal work is often not decent work.

Economic policies that are explicitly employ-ment-oriented and address the costs of informalemployment can achieve better social outcomes– in terms of reducing both poverty and genderinequality – than policies that narrowly targetgrowth. The evidence presented in this bookshows that most of the world’s poor – especiallyin developing countries – are working but they arenot able to work their way out of poverty. A keypathway to reducing poverty and gender inequal-ity is to create more and better employmentopportunities and to increase the benefits andreduce the costs of working informally. Chapter 6presents an employment-oriented framework forfuture policies and action to create more and bet-ter employment opportunities for informal work-ers, particularly women. However, as Chapter 5will show, strong organizations representing infor-mal workers are needed to ensure that appropri-ate policies are developed and implemented andto engage a range of players in this effort.

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Women’s Organizing inthe Informal Economy

Women protest low pay and working

conditions inCambodia’s garmentsector, Phnom Penh.

Photo: PhillippeLopez/AFP/Getty

As noted in earlier chapters, work in theinformal economy tends to have highercosts and risks than work in the formaleconomy. This adds up to a situation ofprecariousness for most informal work-

ers, no matter what kind of work they perform.They do not fit neatly under the type of employee-employer relationship that is generally governedby rules and regulations at the local or nationallevel. They are excluded from social as well aslegal protections and from collective bargainingagreements. Women suffer additional difficultiesbased on gender. They are more likely than menin the informal economy to work in isolation inscattered physical locations such as their own orother person’s homes. The women and theirwork are often hidden within long productionchains. They are weighed down by the doubleburden of income-generating work and unpaidcare work. The lack of protections and the con-straints of gender contribute to the difficultiesinformal women workers face in trying to liftthemselves out of poverty through work.

One of the most important ways for workersin the informal economy to counter the forcesthat contribute to their impoverishment isthrough organizing. Organizing and the act ofcreating responsive organizations are critical ele-ments in their economic, social and personalempowerment. These enable them to take actionto advance and defend their interests, formulatepolicies that will benefit them and hold policymakers accountable over the long term.

Although organizing is more common – andeasier – in the formal economy, informal workershave begun to come together to demand betterconditions. Their organizations have given col-lective voice to some of the world’s most impov-erished informal workers, such as waste pickersand street vendors, and achieved important vic-tories. The many local and international policiesand programmes in support of informal workerscited in this and in the following chapter wouldnot have been possible without the informed andsustained policy efforts of member-based organ-izations of informal workers.

Despite the role of women informal workers

in achieving these gains, many of their organiza-tions are still in their early stages, in part becauseof the extra difficulties women face in organizing.They may be less able than men to attend meet-ings and take leadership roles in workers’ organi-zations because of cultural limitations on theirpublic role, as well as the demands of their unpaidcare work. Nevertheless, women consistentlyseek to create and join groups that will providethem with critical economic and social benefits.

Along with these specific goals, less tangibleconcerns drive women workers to organize.Many of them are vulnerable to danger andexploitation; they work extremely hard for lesspay than men on average. Although they dealwith these conditions as best they can, they alsostrive for respect, dignity and justice. Ultimately,many women workers see that they can findnone of these if they act individually.

Thus, organizing is both an end in itself – aswomen achieve a sense of empowerment andare able to support each other – and a means toleveraging wider impact on the local, nationaland international stage. It promotes and affectspolicies and supports women’s efforts tobecome active members of their communitiesand equal partners in their homes. As a womanorganizer in India put it:

“When individual women from amongst thepoorest, least educated and most disenfran-chised members of society come together,they experience dramatic changes in … thebalance of power, in their living conditions, inrelationships within the household and thecommunity. Perhaps the most importanteffect of empowerment is that the womansays, ‘Now I do not feel afraid.’”

Organizing can begin to address the costsand risks of informal work as well as the vulnera-bility, insecurity and dependence commonlyexperienced by women whose lives are con-trolled by powerful cultural, economic and politi-cal forces. This is particularly true for poorwomen. Organizing can address the many limita-tions that poverty imposes on them, including alack of knowledge about the outside world and

“My friend used to tell me that we had rights. I told her that we donot, that we are like ‘third grade potatoes’ and that’s life. Nobody teaches

us that we are workers and have rights to work, to defend our stalls, to earn a living. But we do have rights.”

Street vendor, Peru (Ospina, StreetNet 2003)

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how it works. For women whose world has beenconfined to home, family and work, the very actof joining an organization adds breadth to theirlives. When women actively participate in anorganization, or take on leadership roles, theirself-confidence, knowledge and understandingof the world generally increases and they gainnew skills.

But organizing alone is not enough to bringabout needed changes. Workers need represen-tative voice in those institutions and processesthat set policies and the ‘rules of the (economic)game’. In a global economy, improving condi-tions for informal workers in general – and infor-mal women workers in particular – requires rep-resentative voice at the international level as wellas the local and national levels. International,regional and national negotiations regarding freetrade agreements, the Millennium DevelopmentGoals (MDGs) and Poverty Reduction StrategyPapers (PRSPs) all need to include the voicesand concerns of informal workers, who are themajority of workers in most developing countriesand the vast majority of the working poor.Ensuring a voice for informal workers at the high-est level requires supporting the growth of theirorganizations, and building capacity for leader-ship in this endeavour. It is not an easy road totravel, but it is a vital one.

Benefits of OrganizingThis chapter looks primarily at member-basedorganizations since these are where womenworking in the informal economy are most likelyto be directly involved. A member-based organi-zation (MBO) is one where the members are theusers of the services of the organization as wellas its managers and owners. Thus, while womenare building and participating in organizations,they are simultaneously building their owncapacity. A member-based organization is mostlikely to deliver benefits and minimize the con-straints faced by the working poor, especiallywomen, because it is directly controlled and runby informal economy workers themselves. This isespecially true of MBOs in which women are fullyrepresented in leadership, providing workingpoor women with a direct avenue to negotiatewith, and influence, those with the power toaffect their working conditions and lives. Beingpart of such an organization can provide a largenumber of benefits for women workers in theinformal economy:

When day labourers, industrial outworkers,homeworkers or contract workers organize tobargain with those who ‘employ’ them, they canincrease their daily earnings and make theirworking conditions more secure. In 1999, aftermany years of protests and organizing, home-workers in the United Kingdom were includedunder national minimum wage legislation. In

South Africa, after a 15-year struggle involving adomestic workers’ union among others, domes-tic workers were brought under theUnemployment Insurance Act in 2003, whichprovides unemployment, death, health, andmaternity benefits.

Organizing helps women who have few, ifany, assets to pool resources, therebyincreasing their economic power. Savings andcredit groups may help the working poor accessmicrofinance services. Producers with little capi-tal may buy raw materials at wholesale prices bycombining their purchases. Landless labourersmay be able to buy land collectively, and farmerswho are unable to enter markets individually mayhave greater access and bargaining power as acollective.

Organizing helps informal workers toaccess services or to build better and biggersystems of social protection in areas such ashealth care and pensions. These activities havegrown in importance as informal employmenthas increased while legal and social protectionsand state social spending have decreased.Organizations of women workers have collective-ly run schools and childcare and health centres.For example, using funds provided by the AccraCity Council, the Accra Market Women’sAssociation in Ghana developed a childcare pro-gramme to keep children safe while their mothersconducted business. The Department of SocialWelfare, Ministry of Health and Ministry of Waterand Sewage collaborated in refurbishing an oldbuilding near the market for the centre, whichcares for infants as well as older children (Wazir2001).

In times of crisis, organizations can mobi-lize support and assistance for victims, as theSelf-Employed Women’s Association (SEWA)was able to do after the massive earthquake inGujarat State, India, or the Siyath Foundation (amember of HomeNet South Asia) did in Sri Lankaafter the 2004 tsunami. The Foundation, whichworks with coir weavers, distributed clothes,food, sanitary napkins and tools; linked individu-als with legal experts; provided psycho-socialsupport; and, working with UNIFEM, developed along-term rehabilitation programme that involvesorganizing members into a cooperative andmechanizing coir production.

The collective strength of organizinghelps women gain representation in local,national and international policy-makingforums, allowing them to use their power andinfluence to make changes in policy and law.In Cambodia, during the 2002 national PRSPconsultations, trade union representatives wereasked to participate. This included the presidentof the National Independent Federation of theTextile Unions of Cambodia (NIF-TUC), repre-senting a large group of both formal and informal

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women workers in the textile and leather apparelsectors. The union representatives successfullyargued for keeping a minimum wage floor in placeas a poverty reduction strategy (Raghwan 2004).

There is one other benefit worth mentioning.A number of gender scholars and women’s rightsadvocates have maintained that working outsidethe household is one of the major ways in whichwomen have been able to improve their personalbargaining power within the household(Petchesky and Judd 1996). While this very muchdepends on the nature and conditions of thework, it is certainly true that women can increasetheir bargaining power in the household byachieving greater bargaining power outside thehousehold – which in turn may help them toimprove the terms of their employment (Chenand Snodgrass 2001; Kabeer 1998).

Identifying as WorkersWork is central to the lives of both women andmen. It takes up a substantial part of their dailyactivities, providing a source of identity and dig-nity as well as a livelihood. In general, men’sidentities as workers are more easily recognizedand appreciated than women’s. People will sayof a man, “he is a miner, an accountant, afarmer”, but describe women primarily in theirroles as mothers or care-givers. Women oftenremain invisible and unrecognized as workers,both because they are women and because workin the informal economy is often hidden. Asdescribed in Chapter 2, the work and contribu-tions of women to the economy, as well as in thefamily and community, are persistently underval-ued, particularly when women are home-basedworkers, paid domestic or care workers, orunpaid contributing workers in family businessesor on family farms. Focusing on their role asworkers rather than homemakers or childcareproviders serves to underscore the fact thatwomen are economic agents who contribute totheir households and the economy and thereforeshould be considered a target of economic aswell as social policies.

Just as women workers are often invisible,so too are their organizations. This is particularlytrue of organizations created by informal womenworkers. Most international and national forums,conferences and seminars tend not to invitethem directly, and not much has been writtenabout them. This is partly due to the fact thatsome organizations choose to operate ‘under theradar’ in order to protect members. But it islargely owing to the fact that the working poor,even if they are organized, remain invisible inmainstream development circles, leading to theassumption that organizations of informalwomen workers do not exist.

The reality is very different. For example,when UNIFEM and HomeNet started a pro-

gramme for home-based workers in Asia, one oftheir first activities was to map organizations thatserved these workers. They found that therewere at least 508 such organizations inBangladesh (BHWA 2003/2004) and 307 inPakistan, with a large percentage of womenmembers (Haider and Tahir 2004). Similarly whenStreetNet International attempted to identifyorganizations of street vendors in Brazil, theylearned of 770 associations of women and menstreet vendors in the city of Sao Paulo alone.

Most organizations of informal workers tendto be small, which can affect their sustainability.The advantages of these small, localized organi-zations is that they are often directly involved inthe issues affecting their members and encour-age active participation and opportunities forleadership. The disadvantages may lie in their lim-ited power and ability to make substantive gainsfor members, limited contributions from members

The Self-Employed Women’s Association (SEWA)

Supporting women’s empowerment through member-based organizations

The Self-Employed Women’s Association (SEWA) is a trade union with 700,000members – all poor working women in the informal economy – in six Indianstates. SEWA describes itself as a banyan tree, with the Union as the trunk, itsmany sister organizations and affiliated member-based organizations as thebranches and the members themselves as the leaves. SEWA was the first tradeunion of informal workers – men or women – anywhere in the world. It started in1972 in the state of Gujarat, seeking to unite urban and rural women informalworkers around the issue of ‘full employment’, which it defines as work, income,food and social security. Its second objective is to make its members self-reliant,both individually and collectively, as measured along eleven ‘points’: employment,income, assets, nutrition, health, housing, childcare, organizing, leadership, self-reliance and education.

SEWA advocates at the national and international levels for policies thatbenefit informal workers. Among its successes are the National Policy for StreetVendors in India (2004) and lobbying conference delegates to adopt the ILOConvention on Homework (1996) (see Box 5.6). It has also co-founded a numberof national and international networks that support informal workers, includingthe National Alliance of Street Vendors of India, Women in Informal Employment:Globalizing and Organizing (WIEGO), StreetNet and HomeNet.

Over the years, SEWA has built a sisterhood of member-based organiza-tions in addition to the union. These include a cooperative bank; village-basedsavings and credit groups, producer groups and cooperatives; and a federationof local groups and cooperatives. All of these economic organizations are ownedby the women who are members of SEWA. They put up the share capital andmanage and control the organizations through democratically elected boards ofworker representatives.

SEWA has also set up specialized institutions that provide services of vari-ous kinds to members, including health care, childcare and insurance; research,training and communication; marketing; and housing and infrastructure. TodaySEWA Bank has 200,000 depositors and a working capital of 900 million rupees(US$20.6 million); SEWA Insurance provides coverage to 130,000 members;SEWA Marketing reaches 400,000 producers; and SEWA Academy trains300,000 women per year.

Box 5.1

and poor financial resources, minimal skills base,isolation and inability to access support.

Several informal women workers’ organiza-tions have managed to reach beyond local struc-tures to create larger organizations that benefitfrom economies of scale, greater access toresources and greater influence. One of the mostsuccessful of these is SEWA, the union of infor-mal women workers in India (see Box 5.1).SEWA’s size gives it the credibility and strengthto bargain for concrete benefits, to accessresources and to influence policy processes atlocal, national and international levels.

Strategies and Forms of OrganizingWhether informal women workers organize, andwhat types of collective organization best fit theirneeds, depends on a range of factors, includingthe broader social, political and economic envi-ronment in which they work and live.Geographical location and restrictions onwomen’s physical mobility can influence the abil-ity to organize. In small scale, family or home-based enterprises, workers are not as visible aspart-time, temporary or contract workers in larg-er enterprises and hence more difficult to contactand mobilize. Migrant workers and workers inexport processing zones (EPZs) often faceextreme difficulty organizing because of strictcontrol of their movements. In addition, manyinformal workers may hesitate to join organiza-tions due to family-based alliances, loyalty to kin-ship networks or fear of job loss. Organizingmust reflect the nature and conditions of work inthe informal economy, including the differenttypes of work informal workers perform, theiruncertain hours and their dispersed workplaces.

Women must also confront issues of powerand discrimination based on gender. Thus, inaddition to specific work-related protections,women workers need guarantees of equal payfor equal or comparable work; adequate, safeand affordable childcare; income protectionwhen giving birth; physical security while travel-ling; and freedom from sexual harassment andsexual exploitation in the workplace.

Because informal workers often cannot eas-ily identify an ‘employer’ with whom to negotiatebetter conditions, or risk losing their jobs if theydo make demands, they have utilized variousforms of organizations and diverse strategies toattain their goals. Where there is no identifiableemployer, for example, street vendors havenegotiated with municipalities to protect theirright to earn a living on the street.

In California, in the United States, con-sumers, workers, unions and the state collabo-rated in creating public authorities to supervisein-home health-care services. An innovativeaspect of these authorities was the presence ontheir boards of the consumers of health care,who were concerned about high turnover ratesand poor services. The health-care providersmeanwhile were generally low-wage informalworkers who received few if any benefits. Untilthey and the unions helped create the publicauthorities, they had no ability to bargain collec-tively. With the creation of the public authorities,unions such as the Service EmployeesInternational Union (SEIU) have been able tonegotiate wage increases and improved benefitsfor health aides, while protecting consumers’rights to hire, train and terminate a health-careprovider (SEIU 2005).

In cases where collective bargaining is diffi-cult, informal workers may use collective actioninstead. Because they can be fired at will, infor-mal workers do not generally take strike action.Instead, informal women workers have more fre-quently turned to public displays of powerthrough marches, demonstrations, rallies andpassive resistance, often coupled with mediaand other publicity. In Thailand, advocacy cam-paigns launched by HomeNet and its allies led tothe Ministerial Regulation Protection Act, passedin Parliament in 2004, allowing home-basedworkers and other informal economy workers toparticipate in Thailand’s social security system(Rakawin Lee, personal communication, 2005).

Organizations of informal workers are set updifferently depending on their different objec-tives, and their structures and by-laws reflect thedifferent legal requirements that govern them.Whether workers organize in cooperatives,issue-based organizations or trade unionsdepends on how they see their own needs andobjectives.

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Siyath Foundation: ProvidingMultiple Services

Any organization of workers is only as good as the services it provides. Forformal workers, collective bargaining and solidarity action may be suffi-cient. But for informal women workers excluded from employment-relatedsocial security and other benefits, their organizations may have to providemuch more.

Siyath Foundation, the organization of women home-based coir work-ers in Sri Lanka, is one of many organizations that have found innovativeways of providing critical services to their members. Women in Sri Lanka’scoastal regions work under extremely difficult conditions to harvest coirfibre, their main source of livelihood. Previously most of them sold theirproducts individually to buyers and were unable to bargain for fair prices.Siyath Foundation has set up a centre where members can bring samplesto display, negotiate deals with buyers, get market information and partici-pate in collective marketing efforts. This facilitates the interface betweenbuyers and sellers so the profit goes to the worker instead of to an interme-diary, and individual women do not have to negotiate prices on their ownwithout knowing what a fair price should be. Siyath Foundation also pro-vides technical training, literacy classes and services to abused and bat-tered women.

Box 5.2Box 5.2

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Worker cooperatives Worker cooperatives are generally the easiest toset up, especially for small numbers of people.Cooperatives provide a structure through whichworkers pool financial resources, equipment,skills and experience (to minimize transactioncosts), enabling them to increase their earningpower and/or to obtain goods and services bysharing the gains from these combinedresources. Cooperatives typically focus onincome generation through business develop-ment (Levin 2002) and pursue both economic andsocial objectives, a factor that has contributed totheir success in empowering women and increas-ing their awareness of the benefits of organizing.They also provide a structure through whichwomen can develop bargaining, managerial andother skills and gain the know-how to eliminateexploitative contractors and intermediaries. Insome cases, cooperatives work together with tra-ditional unions to provide additional benefits,organize new members, or increase their bargain-ing power, as in the case of SEWA (see Box 5.1).

In Burkina Faso, the Organisation Nationaledes Syndicats Libres (ONSL), a trade union, hasreached out to informal women workers involvedin embroidery, knitting and soap production inthe capital city, Ouagadougou. It set up a devel-opment centre that offers literacy, hygiene andnutrition courses to enable women to maintaintheir children’s health records, which are of enor-mous benefit if a child falls ill (the mortality rate ofchildren under 5 years of age is 50 per cent inBurkina Faso). The centre also runs trainingcourses in basic accounting and administration.Through these activities the women have organ-ized themselves, formed a cooperative andjoined ONSL (ICFTU 1999).

Similarly, in Kenya, Rwanda, Tanzania andUganda, national trade unions and cooperativeorganizations have formed partnerships to devel-op a common strategy to organize unprotectedinformal workers. Gender awareness is built intothese initiatives, which have led to an increase inthe number of informal workers organized, high-er incomes and the establishment of a revolvingloan fund (ILO 2005d).

Issue-based organizations An alternative for informal women workers inmany places is to form or join organizationsaround specific issues concerning their lives andlivelihoods. By tackling such issues, women aregenerally also able to address many of theirwork-related concerns, even if these are notdealt with directly. For example, poor women inurban slums face problems because of poorinfrastructure, including a lack of transportationin general (and safe transportation in particular)or a lack of clean water. In some cases, womenhave organized safe transport systems. In oth-

ers, they have set up water users groups as wellas health awareness associations to helpwomen protect themselves and their familiesagainst diseases from unclean water. Theseorganizations may work closely with workerorganizations and NGOs. Although many arelocalized in their communities, several havebegun to operate nationally and internationally,such as SPARC (Society for the Promotion ofArea Resource Centres) in Mumbai, India, whichis a founding member of Shack DwellersInternational (D’Cruz and Mitlin 2005).

Trade unionsAt some point in their effort to gain recognitionand voice, workers’ organizations often need todraw on the strengths of traditional trade unions.For example, they may affiliate with trade unionsin order to struggle for the right to engage in col-lective bargaining. Worldwide, women are lesslikely than men to be in established unions, bothbecause a larger share of male workers are informal employment and because women facemore problems in organizing. They may, forexample, be required to tend to the family afterwork or be unable to travel alone to meetings.Nevertheless, women’s presence in establishedunions is growing globally as their share of workincreases. This growth is currently uneven, vary-ing from country to country (ICFTU 2005a) andfrom industry to industry. Informal women work-ers benefit from the strengths of establishedunions by being part of a functioning and recog-nized organization with resources, skills, con-tacts and access to employers, government andinternational organizations.

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Waste Picker Cooperatives inLatin America

Waste pickers, often the poorest of the poor, have joined together to form success-ful cooperatives in several Latin American countries. The most dynamic waste pick-er cooperative movement is in Colombia, where an NGO – Fundacion Social – hashelped over 100 cooperatives around the country launch a National RecyclingProgramme. The movement’s organizational structure includes national, regionaland local cooperatives, one of the most successful of which is the CooperativaRecuperar. This cooperative was created in 1983 and today has 1,000 members,60 per cent of them women. Members earn 1.5 times the minimum wage andreceive health benefits through the Colombian national health-care system. Thecooperative offers loans, scholarships and life and accident insurance to mem-bers. When Argentina’s economic crisis resulted in factory closings and massivelayoffs, many formerly salaried employees were forced to become scavengers inorder to survive. A number of them are now organized into cooperatives such asthe 14 set up by cardboard recyclers in Buenos Aires. One of these –Cooperativa El Ceibo – was founded by women, who make up the majority of its102 members. The cooperative has signed an agreement with the city govern-ment to provide recycling services to an area covering 93 city blocks. In Brazilwaste pickers have formed cooperatives around the country, including 14 in Riode Janiero, with a total of 2,500 members. Coopamare is one of the most suc-cessful of these, collecting 100 tons of recyclables a month. Members earntwice the country’s official minimum wage (Medina 2005).

Box 5.3

In some cases, informal women workershave banded together to create their own unionsrather than join existing ones that may not be asresponsive to their needs. For women, theadvantages of organizing in ‘new’ unions is thatthey can set up innovative structures and pro-grammes that are less patriarchal and more opento change than traditional unions. For example,women’s unions are generally more creative infinding solutions to issues such as childcare andmeeting times.

These unions are considered new – eventhough some of them, such as Working Women’sForum in India, are over 25 years old – becausethey are different in structure and function fromestablished trade unions and have grown outsidethe formal trade union structure. Some newunions organize by sector, while others are gen-eral unions of informal workers. Some primarilyorganize waged workers in the informal econo-my, while others are made up of own accountworkers. As with cooperatives, some of thesenew unions are supported by established tradeunions, which are increasingly reaching out toinformal women workers as the formal workforceshrinks owing to relocation and restructuring byemployers.

Influencing Policy Decisions: National,Regional and International Networksand AlliancesAlong with improving immediate conditions onthe ground, a major goal of organizing is to giveinformal workers, especially women, the ability toinfluence the forces that dictate the terms ofwork and to affect the policies that can regulate

these forces. At a national level, informal workersneed to have a voice in policy-making forumsand with government and business. At an inter-national level, they need to be heard in institu-tions that deal with trade, labour and economicpolicies. Once agreements are reached, a furtherchallenge for women and their organizations is toensure that what was agreed upon is implement-ed and enforced. Networks and alliances amongwomen’s organizations and NGOs, civil society,multilateral agencies and international policy-set-ting groups help women make their voices heardat the level of policy-making and rule-settinginstitutions and provide links to supportive NGOsand grant-making agencies.

Networks and alliances can help influencepolicy by conducting research and leveragingresources that would be beyond the scope of anindividual organization, allowing informal workersto develop common strategies and campaignsand providing information on other women andtheir struggles.

Social change organizations in the devel-oped world are often concerned about condi-tions for informal workers. Networks built aroundthese issues may be able to support workers indistant countries. The Clean Clothes Campaign(CCC), for example, was created in Europe toimprove the working conditions of and empowerworkers in the global garment industry, most ofwhom are women. Operating out of nineEuropean countries, the CCC is made up ofautonomous national coalitions of trade unionsand NGOs linked to an international network ofNGOs, unions, individuals and institutions inmany countries where garments are produced.The Campaign works with consumers to putpressure on corporations that subcontract gar-

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Women’s Unions Around the Globe

Latin America – Brazil: Associação do Movimento Interestadual deQuebradeira de Coco Babaçu (Interstate Movement of Babassu CoconutSplitters), founded in 1989, is a union of women who harvest, shell and mar-ket coconuts in the Amazonas region. The union has formed alliances withenvironmental protection groups to fight over-exploitation of the crop by pri-vate and public companies. Members can join cooperatives set up by theunion which is linked to trade union federations.

Africa – Chad: Syndicat des Femmes Vendeuses de Poisson (Union ofWomen Fish Vendors) was founded in 2002 and currently has 500 femalefish vendors as members. Its aim is to protect the vendors’ economic inter-ests by increasing the price of fish and improving storage facilities. It alsoseeks to build women’s solidarity through education and social activities.

Europe – the Netherlands: Vakwerk De Rode Draad (Red Thread Union) isa sex workers’ union established in 2002, not long after sex work waslegalized in the Netherlands. It is affiliated with the NetherlandsConfederation of Trade Unions (FNV). In 2004 Red Thread established anorganization for trafficked women and began negotiations with theAssociation of Brothel Owners for a national agreement. Negotiations stalledwhen the brothel owners insisted that sex workers were self-employed(Gallin and Horn 2005).

Box 5.4Box 5.4

StreetNet International

StreetNet International is an alliance of street vendororganizations, launched in 2002. Member-based organi-zations that directly organize street vendors are entitledto affiliate to StreetNet, which promotes the exchange ofinformation and ideas on critical issues facing streetvendors; develops practical organizing and advocacystrategies; promotes local, national and internationalsolidarity between organizations of street vendors, mar-ket vendors and hawkers (who are often in competition);and stimulates the development of national alliances ofsuch organizations.

To date, 19 street vendor organizations – with acombined total membership of approximately 200,000–have affiliated with StreetNet. The alliance has attemptedto ensure that men do not dominate its leadershipthrough its constitution, which stipulates that at least 50per cent of both its international council and its officeholders must be women (StreetNet 2004).

Box 5.5

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ment work to the developing world, demandingthat they improve employment conditions andprevent environmental degradation (CleanClothes Campaign 2005).

At the global level, the umbrella organizationof national trade union federations, theInternational Confederation of Free Trade Unions(ICFTU), and global unions such as theInternational Federation of Food, Tobacco,Agriculture and Allied Workers (IUF), theInternational Textile Garment and LeatherWorkers Federation (ITGLWF) and the Inter-national Federation of Building and WoodWorkers (IFBWW), are now committed to sup-porting and organizing workers in the informaleconomy. They have put in place resolutions,projects and campaigns to support this commit-ment. For example, ICFTU launched a campaignon International Women’s Day 2004, Unions forWomen, Women for Unions, that focuses onorganizing women in the informal economy andEPZs. This campaign is beginning to see results,most notably in Africa where, for example, thenumber of women members in the Mauritaniaaffiliate increased by 30 per cent over a period ofsix months (ICFTU 2005b). In addition, the WorldConfederation of Labour (WCL) has prepared atraining guide to familiarize trade unionists withinformal economy issues and has undertakenwork on regulatory frameworks (WCL 2004).

In another international alliance, the IUF, theILO and the International Federation ofPlantation, Agricultural and Allied Workers(IFPAAW) joined together to develop innovativeprojects in Ghana, Uganda, Zambia andZimbabwe to bring more women into unions.Concerned about the total absence of women inleadership positions and their low participation inunion activities, the three organizations helpedcreate programmes that used songs, drama androle-playing to teach both male and female ruralworkers about trade unions and gender issues.By the end of the project, female membershiphad increased in all four countries, as had thenumber of women office holders.

In Central and Eastern Europe, trade unionswere taken by surprise by the explosion of theinformal economy in the transition from plannedto free market economies. With support from theICFTU, three pilot campaigns are underway inBulgaria, Lithuania and Moldova, built aroundawareness-raising, organization, representationand social dialogue. The campaigns are develop-ing cooperative links with NGO networks such asSolidar and the International RestructuringEducation Network Europe (IRENE) (ILO 2005b).

HomeNet Asia is one of the best examples ofhow member-based organizations can collaboratewith international agencies and networks to changepolicies and build voice. In the 1980s, when home-based women workers in different countries began

organizing, several of their organizations cametogether to explore common issues and strate-gies. In 1992, these groups formed HomeNetInternational to formalize their relationship.

One of their first concerns was to join theeffort to push for international recognition ofhome-based workers. In addition to labourorganizations and the members of HomeNet, thecampaign drew in a variety of like-mindedorganizations and individuals. UNIFEM con-vened regional workshops for government poli-cy makers from different countries, whileresearchers compiled statistics on the numberof homeworkers in various countries and sectors(Chen et al. 1999). In 1996, the InternationalLabour Conference adopted the ILO Conventionon Home Work (#177).

The Convention opened an important spacefor home-based workers to expand their organiz-ing efforts. In 2000, a UNIFEM/WIEGO confer-ence for government officials, representatives ofmember-based organizations of informal work-ers, and researchers from five countries in SouthAsia resulted in the passage of the KathmanduDeclaration, which committed governments topromote national policies in support of home-based workers.

UNIFEM then worked closely with organiza-tions in Asia to develop regional networks ofnational associations of home-based workerorganizations, including HomeNet South Asiaand HomeNet South East Asia. At present thesenetworks include over 500 organizations ofhome-based workers that are working to influ-ence national policies on issues such as socialsecurity and fair trade practices. Due to the pro-motion and support of UNIFEM, as well as theinternational trade union movement (in particularFNV in the Netherlands), HomeNet in Asia isgrowing rapidly and making visible the issues ofthe estimated 60 million home-based workers ofthe region (excluding China).

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ILO Home Work Convention # 177

Homeworkers, including industrial outworkers who work at home under asub-contract, are often not recognized as having workers’ rights and are sel-dom covered by labour or social protections. An alliance of organizations ofhomeworkers, trade unions, NGOs and international partners, includingUNIFEM, lobbied conference delegates to adopt the only ILO Conventionspecifically targeted to the informal economy: ILO Convention #177 on HomeWork. Adopted in 1996, the Convention calls for a national policy on homework aimed at improving the conditions of homewokers, most of whom arewomen. A related Recommendation, passed the same year, details a fullprogramme to improve the conditions of homework. To date, only four

countries – Albania, Finland, Ireland and the Netherlands – have ratified theConvention, although several other countries are considering national legisla-tion in line with the Convention and its Recommendation, and the EU hasencouraged its member states to consider ratification (see Chen et al. 2004).

Box 5.6

The Next StageAs this report has shown, a complex mix of chal-lenges stands in the way of poor women’s abilityto improve their conditions of work: their fre-quently isolated working arrangements; theirdouble day of paid and unpaid work; the multipledisadvantages women face by reason of theirgender, race, religion, caste and class; as well asthe wider political, economic, social and legalfactors discussed throughout this report thatrestrict the rights of informal workers in general,and informal women workers in particular.Although organizing can make a difference,women’s comparative lack of education andresources, as well as their inability to move aboutfreely in some regions, make it particularly diffi-cult for them to join organizing efforts.Discrimination and a general disregard forwomen may contribute to the reluctance of poli-cy makers to bargain with women, especiallypoor women.

Despite the enormous difficulties, however,informal women workers have created effectivestrategies and real partnerships that involvecommunities and local leadership. These effortsneed to be built up and expanded through finan-cial backing, capacity building and support forwomen’s leadership. As Dan Gallin, chair of theGlobal Labour Institute, has stated: “It is only byputting themselves in the position of exercisingpower through organizations that workers cangain voice. Without organization, voice becomesan ineffectual ‘squawk’” (Gallin 2002).

Women in the informal economy must besupported in their efforts to gain voice and buildcapacity so they have the skills to negotiate andinfluence policy. Organizations such as tradeunions, NGOs and multilateral agencies can pro-vide financial and technical support to helpwomen build and sustain member-based organi-zations at the local, national, regional and interna-tional levels. They can provide ways throughwhich these organizations can increase their num-bers, scale up their initiatives, and network toincrease visibility and power. They can assist themto improve organizational effectiveness throughdeepening democracy, implementing innovativestrategies, empowering women leaders and mem-bers and attaining financial sustainability. Tradeunions can make even greater efforts to join withorganizations of informal workers to maximize thevoice of workers at the international level and toinsert employment issues into the general debateon poverty reduction. There are three main areaswhere increased support and activism can have aprofound effect: (1) strengthening grassroots,member-based organizations, (2) promoting theright to organize and (3) creating an enabling envi-ronment by increasing informal women workers’representation in policy and law processes.

Strengthening member-based organizationsMember-based organizations depend on thecommitment and active participation of theirmembers. Education and awareness play an

Women apply for small business loans through an NGO, Kyrgyzstan. Photo: Caroline Penn/Panos

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important role in building participation. NGOs,agencies, trade unions and others could providesupport at this very basic level of organizing. Inpartnership with member-based organizations,they could offer to support or provide educationclasses for women workers to build solidarity,self-esteem and confidence. For example, theInternational Federation of Worker’s EducationAssociations (IFWEA), a global worker educationinstitute, is working on a number of projects tar-geting workers in the informal economy, particu-larly women. These include projects with the ILOAsia sub-regional office in Bangkok to develop atraining manual on organizing in the informaleconomy.

Generally, women in the informal economyhave not had much chance to learn differenttypes of skills. This contributes to the difficultytheir organizations have sustaining themselvesand influencing employers and policy makers.Building capacity and skills at the grass-rootslevel through partnerships with other organiza-tions and various supportive agencies can helpremedy this. It is also increasingly important fororganizations, especially larger ones and net-works, to learn how to use communication tech-niques and modern information technology tolink with each other.

The ILO emphasizes the importance ofmembership-based organizations that are demo-cratic and independent (ILO 2002c). However,organizations of informal workers, consisting asthey do of poor people, are often unable to sus-tain their organizations through member dues.Moreover, they are rarely able to obtain the need-ed additional financial support through loans,revolving capital, matching grants or investmentin physical resources. For this reason, alterna-tive financial resources are critical in order tosupport creative approaches to bringing informalworkers into the protection of employment regu-lations. Direct, appropriate and sustained finan-cial support must be made available if organiza-tions are to grow, develop and stabilize.

Promoting the right to organizeMost informal women workers do not have fullrights as workers. This includes the basic rightsto freedom of association, and thus to organize,and to enjoy legal protections. Employers andgovernments often deliberately seek to suppressor avoid granting or implementing rights, some-times by violent means. Even in the formal econ-omy, workers may have to struggle for theserights; for workers in the informal economy, bothself-employed and wage workers, who have noclear or ongoing relationship with an employer,the challenges are even greater.

The freedom to organize when organizationsare not recognized can be a hollow right. Manyorganizations struggle for recognition and regis-

tration – often over many years – seeking toacquire legitimacy and status in the eyes ofpotential members, opponents, governmentsand funders. Organizations must grow and beactive to successfully engage in such strugglesand to put rights into practice.

Given the many constraints describedabove, informal women workers and their organ-izations have adopted different ways of recruitingand retaining members and of working to buildtheir rights. The organizations may reach out toworkers in innovative ways: to homeworkers intheir homes, at a group workplace or at a com-munity centre; to migrant workers in dormitories;to domestic workers in training centres; to streetand market vendors at their workplaces or near-by open spaces, and so on.

The ILO has recognized the rights of informalworkers to freedom of association and to organizeboth as employees and as the self-employed toimprove their condition (see Box 5.7). Employers,government bodies and policy makers must dothe same. Informal worker organizations, as wehave seen, come in a variety of forms, and all areimportant and must have formal recognition.Organizations of informal women workers shouldhave representation in all forums, from the local tothe international, that influence the economic andsocial position of their members, most critically inlabour, trade and civil society forums.Representation should be permanent rather thanad hoc, and statutory rather than informal.Negotiation and collective bargaining must begenuine, with clear agreements and effectiveimplementation and monitoring, whether bargain-ing on income, policy or other issues.

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Freedom of Association and theInformal Economy

The ILO fundamental conventions on freedom of association (Nos. 87 and 98)explicitly state that all workers, without distinction, enjoy this fundamental right.Thus workers in the informal economy have the right to organize and, wherethere is an employer, engage in collective bargaining. They should be able tofreely establish and join trade unions of their own choosing. Workers’ organiza-tions should be able to carry out their trade union activities (elections, adminis-tration, formulating programmes) without intervention from public authorities. Theright of freedom of association is equally applicable to the self employed. Thusthe self employed who work in the informal economy should also be free to cre-ate organizations of their own choosing, such as small business associations,and enjoy the same rights as described above. Complaints regarding infringe-ment of the right to associate can be brought to the ILO via its Committee onFreedom of Association (CFA). These complaints should emanate from a tradeunion or an employers’ organization, although theoretically they can also comefrom a government. The trade union or employers’ organization does not have tobe registered or recognized at the national level in order to bring a complaint, nordoes the country in question have to have ratified the ILO Conventions on free-dom of association.

More information on the CFA, its procedures and cases can be found at:http://webfusion.ilo.org/public/db/standards/normes/libsynd/index.cfm?Lang=EN&hdroff=1 (Katerina Tsotroudi, personal communication, 2005).

Box 5.7

Increasing representation in policy andlaw processes The lives of poor informal women workers areaffected by policy and law at every level, from thelocal to the international. In order for organiza-tions of women workers to flourish, an enablingenvironment is required that gives these organi-zations space to grow. Currently, laws that guar-antee freedom of association and recognizeorganizations vary considerably from country tocountry. For example, existing labour law insome countries allows for many different formsof trade unions, while in others only enterprise-based unions are allowed.

In some countries cooperative law allowsgenuine and independent self-help organizationsto develop, while in others they become quasi-governmental organizations. Policies in differentareas can encourage the growth of these organ-izations or can be so unfavourable that organiza-tions are unable to take root. Thus finance andbanking policies can promote or retard thegrowth of women’s financial institutions, tradepolicies can encourage or discourage the growthof women’s cooperative marketing and socialsecurity policies will affect organizations thatprovide services such as childcare.

Women are developing strategies throughtheir organizations to ensure their participation inpolicy-making and rule-setting bodies at the dif-ferent levels. This is a slow process, with gainsand setbacks along the way, but women continueto build alliances, coalitions and networks

backed up by research and technical assistanceto jointly advocate and/or negotiate. The adop-tion by the International Labour Conference ofthe conclusions on decent work and the informaleconomy marked an important consensusamong employer, worker and government dele-gates. It also reflected an alliance involving tradeunions, organizations of informal workers andresearchers (ILO 2002a).

At the national level in many countries, infor-mal women and men workers are demandingchanges to labour laws in order to guaranteetheir rights as workers. In some cases they havesucceeded, especially where they have beenorganized or supported by recognized tradeunions. In Ghana, the Ghana Trade UnionCongress (GTUC) fought for, and won, a broaderdefinition of ‘worker’ and ‘workplace’ in anattempt to include more informal workers. It alsowon the extension of rights, minimum wages andbenefits to casual and temporary workers (KofiAsemoah, personal communication, 2004). InSouth Africa, a new labour law provides legalprotections for domestic and farm workers, andwas negotiated in a tripartite forum that includedmajor trade union federations.

As the Millennium Declaration recognized,gender equality and women’s empowerment arecritical to efforts to eliminate poverty, hunger anddisease and to stimulate sustainable develop-ment. It is essential therefore that working poorwomen in the informal economy are recognizedat all policy-making levels. Supporting their

Tobacco picker, member of a work gang, Gujarat state, India. Photo: Martha Chen

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efforts to attain voice and recognition is a largetask that will require concerted efforts over a longperiod. International agencies, governments,trade unions, women’s organizations and otherNGOs all have roles to play in helping to increasethe visibility and voice of informal workers andtheir organizations. The opening of institutionaland political space brought about by multi-stakeholder development frameworks such asthe MDGs or the PRSPs can provide new oppor-tunities for the working poor to influence policyand decision-making from the local to the inter-national level (see Chapter 6).

In order to take advantage of these opportu-nities, partnerships and coalitions are alreadyforming at the grassroots level, developingstrategies for informal working women’s advoca-cy and participation in the MDG and PRSPprocesses. For example, in Kenya, UNIFEM,working with NGOs and informal women work-ers, and supported by UNDP, built a coalition toinclude poor women’s voices in the MDGprocess. The coalition met with rural and urbanwomen around the country to determine whatthey needed to improve their lives. The informa-tion from these discussions was presented to themedia, government and policy makers. Althoughat the early stages of implementation, this coali-tion is now participating in MDG needs assess-ments and working to promote gender respon-sive budgeting.

In Kyrgyzstan, women’s groups used les-sons learned from work on women and landreform to engender the MDG process.Supported by UNIFEM, women’s groups andlegal experts had worked at the local level tobuild capacity and awareness around women’sright to land and property. Several thousand ruralwomen attended seminars, as did governmentstaff, on land and property ownership issues.Legal centres were set up to advise womenabout their rights, and amendments to the exist-ing land code were drafted and submitted toParliament. The organizing and capacity-buildinginvolved in this effort resulted in a cadre of infor-mal agricultural women workers who could givevoice to women’s economic and social concernswhen economic policy was being debated.Women leaders were able to mainstreamwomen’s issues into MDG, PRSP and CEDAWreporting and monitoring, which was then fedinto the National Action Plan, successfully align-ing all four processes. They also succeeded inproposing new indicators on gender equality inthe workforce for Goal 3 of the MDGs (seeChapter 3).

International agencies have an important roleto play in these alliances. They are in a uniqueposition to strengthen the efforts of organizationsrepresenting informal women workers to engage

in policy dialogues. There are numerous actionsinternational agencies, national governments,global unions, policy research networks, NGOsand academic institutions can take to promote anenabling environment. They can recognize andacknowledge the importance of member-basedorganizations representing informal workers intheir own policies and documents. They can helpresearch and develop innovative policy and lawoptions on issues such as the rights of informalwomen working on their own account or institu-tionalizing new bargaining forums. In partnershipwith local organizations, they can work with gov-ernments to make changes and provide technicaland funding support. Finally, they can facilitatelinkages among women’s and workers’ organiza-tions, and between informal workers’ organiza-tions and trade unions. This support at every levelwill help to ensure that organizations representinginformal workers build the power to exert influenceover the forces that affect the lives and work oftheir members.

Where Informal Women WorkersNeed to be Represented

Local levelCommunity councils: social, political, administrativeCollective bargaining bodies, tripartite boardsMunicipal planning, zoning and advisory boardsRural planning bodies and resource allocation bodies

National levelPlanning commissions and advisory committeesTripartite bodiesChambers of commerceTrade union federationsCollective bargaining bodiesSector-specific associations or boardsNational MDG and PRSP negotiations

Regional levelInter-governmental commissionsBilateral trade negotiationsDevelopment banks and agenciesTrade union bodies

International levelUN specialized agencies/funds (UNIFEM, UNCTAD, ILO)ICFTU, global unions, worker networksFinance institutions, IMF and World BankTrade negotiationsFair and ethical trade initiativesCodes of conduct and international framework agreement negotiationsCivil society movements

Box 5.8

6CHAPTERA Framework for Policyand Action

Vendors selling phonesand cigarettes on a

street in Bogota,Colombia.

Photo: GerardoGomez/AFP/Getty

The premise of this report is that promotingdecent work for the working poor, bothwomen and men, is a critical pathway toreducing poverty and advancing genderequality. With most of the working poor in

the informal economy, the critical question is: Whatcan be done to promote decent work for informalworkers, especially women?

This chapter presents a framework for policyand action to reduce the costs and increase the ben-efits of informal employment in order to combatpoverty and gender inequality. It recommends strate-gies and provides examples of what different stake-holders – governments, international organizations,private firms and business associations, workers’organizations and non-governmental organizations(NGOs) – have done to promote decent work for theworking poor, especially women. But first it takes upsome of the ongoing debates around the informaleconomy that inform all policy discussions.

Policy Debates on the Informal EconomyHistorically, policy makers, economists and otherobservers have differed about the role of the infor-mal economy. As noted in Chapter 1, some look atit positively, as a ‘cushion’ during economic crisesor a dynamic source of entrepreneurial growth –provided it is free to operate without governmentregulations. Others see it more problematically,arguing that informal entrepreneurs deliberatelyoperate outside the reach of government regula-tions in order to avoid taxation and registration. Stillothers focus on the working poor within the infor-mal economy, regarding them either as a vulnerablegroup who need social assistance or as unprotect-ed workers who need legal protections.

Underlying these varying perspectives are ide-ological differences about whether and how to reg-ulate the informal economy, and the larger issue ofwhether or not government should get involved inregulating the economy at all. A second ideologicaldivide, related to the first, has to do more specifi-cally with whether and how to formalize the informaleconomy, and the related issue of whether and how

the informal economy, the formal economy and theformal regulatory environment are linked.

Whether to regulateThere is a fundamental debate in internationaldevelopment circles about the role of governmentin regulating the economy or the operation of mar-kets. Neo-classical economists are trained to thinkof government interventions in labour markets – insetting wages or regulating hiring and firing – ascreating distortions that lead to either unemploy-ment or informal employment. But governmentscan and do intervene in labour markets. To makelabour markets operate more efficiently, they canand do help facilitate market information and matchlabour demand with supply by facilitating informa-tion-exchange and providing training on the skillsrequired. To make labour markets more equitable,they can and do help correct the unequal balanceof power between employers and workers, reducediscrimination against disadvantaged groups suchas women or ethnic minorities and/or provide pro-tection against work-related risks and uncertainties.

A parallel debate concerns whether and howgovernments should regulate the informal economyin particular. One approach, championed byHernando de Soto of Peru, argues for reducing theburden of bureaucracy that leads entrepreneurs tooperate informally and for extending the ‘rule of law’,in particular property rights, so that informal entre-preneurs can convert their informal assets into realassets (de Soto 2000, 1989). Another approach, pro-moted by Alejandro Portes and others who take astructuralist view, sees a government role in regulat-ing the unequal relationship between ‘big business’and informal producers and traders in order toaddress the imbalance of power within markets(Portes et al. 1989). A third approach, promoted bythe ILO, UNDP and UNIFEM among others, sees agovernment role in promoting economic opportuni-ties, developing appropriate legal and regulatoryframeworks, extending social protection and pro-moting social dialogue to increase representation ofinformal workers.1

“The police used to harass us a lot. They would take away ourvegetables. They would take away our bundles. Since we joined SEWA,

they have stopped harassing us. No police or anyone else harasses us now.” Street vendor, India (cited in Chen and Snodgrass 2001)

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1 The International Labour Conference which sets ILO policies has stressed a comprehensive approach involving the “promotion of rights,decent employment, social protection and social dialogue” (ILO 2002c: 59). ‘Social dialogue’ refers to all types of negotiation or consulta-tion among representatives of governments, employers and workers on issues of common interest; its practice varies by country.

In reality the informal economy has been var-iously over-regulated, under-regulated and com-pletely ignored. As part of economic restructuringand market liberalization, there has been a fairamount of deregulation, particularly of financialmarkets, labour markets and international trade.Deregulation of labour markets is associated withthe rise of informalized or ‘flexible’ labour mar-kets. Some labour advocates have argued for re-regulation of labour markets to protect informalwage workers from the economic risks and uncer-tainty associated with flexibility and informalization.

Moreover, the regulatory environment oftenoverlooks whole categories of the informal work-force. A missing regulatory environment can be ascostly to informal operators as an excessive regula-tory environment (Chen et al. 2004). For example,some governments do not guarantee informalworkers freedom of association or the right toorganize. In such cases, informal workers may fallinto a legal void when they try to form associationsor join trade unions simply because the law doesnot provide an appropriate legal framework (ILO2004b). Also, few cities have adopted a coherentregulatory approach towards street trade (Bhowmik2005; Mitullah 2004), typically trying either to elimi-nate it or to turn a ‘blind eye’ to it. Both have a puni-tive effect: eviction, harassment and the demandfor bribes by police, municipal officials and othervested interests. The best practice would be to sit-uate informal trade in local economic developmentor small enterprise support departments. The worstpractice – as in many cities – is situating streettraders in law enforcement departments, such astraffic control and police.

In considering the appropriate role for govern-ment in regulating labour markets, it is importantnot to overlook the private sector. Private firmsdecide whether or not to comply with existing gov-ernment regulations when they hire or fire workers,set wages and manage working conditions. Further,in today’s global economy, transnational corpora-tions (TNCs) often have more power than local gov-ernments, given their control over resources, theiraccess to markets and new technologies and theirability to locate and relocate production as circum-stances suit them.

In sum, what is needed is appropriate regula-tion, not complete deregulation or the lack of regula-tion. An appropriate response would strike a balancebetween efficiency and equity concerns and takeinto account the specific interests of formal and infor-mal firms, formal and informal workers, men andwomen, and the behaviour of the corporate sector.

For instance, it is important to take into con-sideration the capacity of different sizes of firms tocomply with business regulations. However, a bal-anced approach should not undermine respect forfundamental principles and rights at work for peo-ple in the informal economy, since these are basichuman rights.

Whether to formalize At the core of the debates on the informal economyis the oft-repeated question of whether the informaleconomy should be ‘formalized’. It is unclear, how-ever, what is meant by ‘formalization’. To many itmeans that informal enterprises should obtain alicense, register their enterprises and pay taxes. Butto the self-employed these represent the costs ofentry into the formal economy. If they pay thesecosts, they expect to receive the benefits of operat-ing formally, including enforceable commercial con-tracts, legal ownership of their place of businessand means of production, tax breaks and incentivepackages to increase competitiveness, member-ship in trade associations and statutory social pro-tection. In reality, many microenterprises are neithercompletely formal nor informal when it comes toregulations (Reinecke and White 2003). The issue iswhether those who comply with regulations receivethe benefits of compliance.

To informal wage workers, however, formaliza-tion means obtaining a formal wage job or convert-ing the job they have into a formal wage job, with asecure contract, worker benefits and social protec-tion, along with the right to organize. In the case ofwage workers, it is their employers who decidewhether or not to comply with regulations.

The formalization debate should be turned onits head by recognizing that formalization has differ-ent meanings for different segments of the informaleconomy and by acknowledging that it is unlikelythat most informal producers and workers can beformalized – although efforts should be made to doso. Formalization of informal enterprises requiresbureaucracies that are able to simplify registrationrequirements and to offer informal businesses theincentives and benefits that formal businessesreceive. Formalization of informal wage labourrequires creation of more formal jobs and extensionof formal legal and social protection to informalworkers. However, recent trends suggest thatemployment growth is not keeping pace with thedemand for jobs – there simply are not enough jobsto go around. And employers are more inclined toconvert formal jobs into informal jobs than the otherway around.

Finally, those who work on the informal econo-my are often asked two additional questions. First,do you promote informal employment, despite itsconsequences? Our answer is that informalemployment is a widespread feature of today’sglobal economy that needs to be upgraded: thegoal is to reduce the costs and increase the bene-fits of working informally. Second, are there any‘magic bullets’ for improving conditions of informalemployment? Our answer is that while some inter-ventions (such as microfinance) are seen as magicbullets to improve conditions in some cases, no sin-gle intervention can address all of the constraintsand needs faced by the working poor in the infor-mal economy. What is needed is a context-specific

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mix of interventions, developed in consultation withworking poor women and men and informed by anunderstanding of their significance in the labourforce and their contribution to the economy.

In sum, we are calling for:� renewed focus on expanding formal employment

– by putting employment creation and decentwork at the centre of macroeconomic policy;

� increased efforts to formalize informal enterprisesand informal jobs by creating incentives and sim-plifying procedures for entrepreneurs to registerand by persuading employers to provide morebenefits and protections to their workers; and

� a series of interventions to help those who workin the informal economy get higher returns totheir labour – by increasing their assets andcompetitiveness and by assuring better termsand conditions of work (Diez de Medina 2005).

Framework for Policy and ActionIn setting priorities for policy and action, it is impor-tant to underscore why policy and action are need-ed. As shown in Chapter 3, those who work in theinformal economy, especially women, have loweraverage earnings and a higher poverty risk thanthose who work in the formal economy. And, asshown in Chapter 4, the benefits of informality areusually not sufficient and the costs are often toohigh for most informal workers to achieve an ade-quate standard of living. Moreover, they lack work-er rights, social protection and representativevoice. As such, informal employment should beconsidered from a rights perspective. The 1998ILO Declaration on Fundamental Principles andRights at Work highlights the key areas of free-dom of association and collective bargaining,and the elimination of discrimination, forcedlabour and child labour. As State parties to theConvention on the Elimination of All Forms ofDiscrimination against Women (CEDAW) and theInternational Covenant on Economic, Social andCultural Rights (ICESCR), governments have aduty to enable all workers, including women andmen in informal employment, to claim their rightsas workers, including the right to organize, toreceive employee benefits and to negotiate formalcontracts. Beyond this, international agencies, civilsociety and the private sector all have an obligationto help informal workers, especially women,achieve an adequate standard of living, claim theirrights and gain representative voice.

In the following framework, the goals for policyand action are presented as a set of six strategicpriorities, involving a range of possible interventionsfrom policy reform and institutional development toservice delivery. Implicit in this framework is theneed for current economic development strategiesto be reoriented in order to improve employmentopportunities and reduce poverty. As discussed inChapter 1, the current Poverty Reduction StrategyPapers (PRSPs) fail to include a coherent approach

to employment with concrete policy interventions,raising questions about the feasibility and sustain-ability of their poverty reduction goals. Addressingthis problem requires restructuring the PRSPs sothat macroeconomic policies, sectoral interven-tions, governance and social policy are coordinatedto deliver more and better employment opportuni-ties, particularly for women.

Similarly, it is crucial to recognize that thecurrent policies endorsed by global institutions,such as the International Monetary Fund (IMF) orthe World Trade Organization (WTO), may limit theeffectiveness of strategies to generate betteremployment. For example, a narrow focus oninflation-targeting frequently has collateralimpacts on interest and exchange rates, and cancreate an economic environment hostile to anexpansion of decent employment opportunities.Successful implementation of the policy frame-work proposed here would require adjustment inthe focus and targets of the strategies promotedby these institutions.

Strategic prioritiesThe three overarching goals – to expand formalemployment, to formalize informal enterprises andjobs and to increase the returns to their labour ofinformal workers—are linked to a set of more spe-cific goals aimed at promoting economic opportu-nities, economic rights, social protection, and rep-resentative voice for the working poor, especiallywomen, in the informal economy. Achieving theserequires a favourable economic policy environ-ment as well as targeted interventions, reflected inthe following strategic priorities:

#1 –To Create a Favourable Policy EnvironmentThe economic policy environment needs to be

supportive of the working poor, rather than blind tothem or biased against them. This requiresaddressing biases in general policies as well asdesigning and implementing targeted policies. #2 - To Increase Assets and Access

For the working poor to be able to take advan-tage of the opportunities offered by a morefavourable policy environment, they need greatermarket access as well as the relevant assets andskills with which to better compete in the markets. #3 – To Improve Terms of Trade

To compete effectively in markets, in addi-tion to having the requisite resources and skillsthe working poor need to be able to negotiatefavourable prices and wages for the goods andservices they sell, relative to their cost of inputsand their cost of living.#4 – To Secure Appropriate Legal Frameworks

The working poor in the informal economyneed new or expanded legal frameworks to pro-tect their rights and entitlements as workers,including the right to work, rights at work andproperty rights.

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#5 – To Address Risk and UncertaintyThe working poor need protection against

the risks and uncertainties associated with theirwork as well as the common contingencies ofproperty loss, illness, disability and death.#6 – To Strengthen Representative Voice andIncrease Visibility

To demand their rights and influence the pol-icy decisions that shape their lives, the workingpoor need stronger organizations and a voice inpolicy-making as well as greater visibility innational data and statistics.

Most of these strategic priorities have beenon the international development agenda forsome time. But several points about them do notget sufficient attention. First, poverty andinequality cannot be reduced by simply expect-ing that economic policies will generate sufficientemployment and that social policies will com-pensate those left out. Economic growth oftenfails to generate sufficient employment, andsocial policies to address this failure are inade-quate where they exist and often neglected alto-gether. Second, poverty reduction requires amajor reorientation in economic priorities tofocus on employment, not just growth and infla-tion (Lee and Vivarelli 2004). And third, to beeffective, strategies to reduce poverty and pro-mote equality should be worker-centred.

In recent years, many in the internationaldevelopment community have called for a peo-ple-centred approach to poverty reduction. Theframework proposed here focuses on the needsand constraints of the working poor, especiallywomen, as workers, not only as citizens or mem-bers of poor households. A worker focus will pro-vide coherence and relevance to poverty reduc-tion strategies because most poor people areeconomically active, because earnings representthe main source of income in poor householdsand because working conditions affect all dimen-sions of poverty (i.e., income, human develop-ment, human rights and social inclusion).

InterventionsThese broad strategies require targeted interven-tions. First, policy reforms are needed to correctfor biases in existing policies against the workingpoor, especially women, in the informal economyand to develop policies to support specificgroups of informal workers. Second, relevantinstitutions need to become more inclusive of theinformal workforce; and organizations represent-ing informal workers need to be strengthened tohave effective voice. Third, a range of servicesare needed, including microfinance, businessdevelopment, infrastructure, social services,occupational health and safety and social pro-tection (insurance, safety nets, disability andpensions).

To successfully pursue these broad strategiesand implement the interventions requires concert-ed action by a range of players—including govern-ments, international trade and financial institutions,intergovernmental agencies, the donor community,the private sector, consumers and the public,unions and other worker organizations and NGOs.

Given the variety of interventions and players,coherence is crucial. At the international level, inter-national trade and financial systems need to oper-ate in accordance with widely agreed-upon UNcommitments, especially as regards poverty reduc-tion, gender equality and labour standards (Floroand Hoppe 2005; World Commission on the SocialDimension of Globalization 2004). At the nationallevel, governments should take a lead role in ensur-ing that the efforts of different actors are consistent.Too often interventions in support of the informaleconomy – and of women workers in particular –are made in a piece-meal fashion by differentactors, which can produce sub-optimal, if not con-tradictory, effects. It is also important that the gov-ernment’s own policies are coherent: this requiresaccountability for and monitoring of progresstowards shared goals and priorities, as well as inter-departmental coordination.

Strategies and interventions for each of thesestrategic priorities are outlined below.

#1 – To Create a Favourable PolicyEnvironmentMost if not all economic and social policies – bothmacro and micro – affect the lives and work of theworking poor in various direct ways.

As workers: government policies and regula-tions influence hiring and firing, minimum wages,benefits, working conditions, training and long-termprospects of informal workers; create incentivesand benefits for enterprises; and determine whetherthe working poor have the right to organize, strikeand be represented in collective bargaining negoti-ations or rule-setting institutions.

As consumers: government policies affect theaccessibility, variety and costs of goods and servi-ces, including those consumed by the working poor.

As users of infrastructure, finance andproperty and natural resources: government poli-cies regarding infrastructure investments, financialmarkets, property rights and the use of urbanspace, utilities and natural resources all affect theeconomic opportunities available to the workingpoor and their ability to take advantage of them.

As potential recipients of tax-fundedservices or transfers: whether or not the work-ing poor, especially women, receive public serv-ices or public transfers depends in large part onwhether these services and transfers are target-ed to specific groups of the working poor, thelocations where the working poor live and theparticular activities from which they earn theirlivelihoods (World Bank 2005).

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Creating a favourable policy environmentinvolves both addressing biases in existing policiesthat disadvantage the working poor and developingnew policies targeted to them.

Addressing biasesA recent seven-country study sponsored by the ILOidentified biases against micro- and small enterpris-es (MSEs) and made a set of recommendations asto how to address them, including setting up linesof credit for MSEs, streamlining licensing arrange-ments and simplifying taxation policies (Reineckeand White 2003). Ideally, such an analysis shouldlook at the intersection of different biases: thosethat favour the rich over the poor, some ethnicgroups over others, the formal over the informaleconomy and men over women.

Women’s rights advocates have pointed outthat women’s location in the economy means thatgeneral economic policies cannot be assumed tobe gender neutral simply because they are genderblind. To make policies more gender-sensitive, theyhave developed a set of analytical tools: genderassessments, gender impact assessments andgender-responsive budgeting. Gender assess-ments (see Box 6.2) involve the analysis of nationaldata and research findings to assess the situationof women and men/girls and boys in order to devel-op gender-sensitive national policies. Genderimpact assessments are designed to assess theimpact of specific policies, such as trade or invest-ment, on women and men/girls and boys. Gender-responsive budgeting integrates a gender perspec-tive into the budget process and tracks how gov-

ernment revenues and expenditures affect womenand men/girls and boys. A gender budget is not aseparate budget for women but an attempt to dis-aggregate expenditure and revenue according totheir different impacts on women and men(UNIFEM 2000).

As with gender, economic policies that are‘blind’ to how labour markets are actually structuredand function cannot be assumed to be ‘neutral’towards labour. Economic planners should take intoaccount the size, composition and contribution ofboth the formal and informal labour markets in dif-ferent countries, and recognize that their policies arelikely to have differential impacts on informal andformal enterprises, on informal and formal workers,and on women and men within these categories. Toassess and address how economic policies affectthe working poor, especially women, it is importantto analyse how class, gender and other biases inter-sect in labour markets, including biases that favourcapital over labour, formal over informal enterprises,formal over informal workers, and men over womenwithin each of these categories.

A newer tool, informal economy budgetanalysis, views budget allocations (or the lackthereof) as an expression of policy approaches.Informal economy budgets are designed to dothree things. First, they examine the extent to whichthe state budget shows an awareness of the exis-tence and situation of informal workers and theirenterprises. Second, they identify measures ofdirect and indirect state support, and thus have thepotential to raise the visibility of informal workersand their enterprises and encourage advocacy for

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A Kurdish family during harvest, Iraq. Photo: Behrouz Mehri/AFP/Getty

greater support. Third, they can be used to assessthe gap between policies, budget allocations, andpolicy implementation.

Two pioneering informal budget initiatives inSouth Africa (Budlender et al. 2004; Budlender2000) showed the need to analyse budget alloca-tions across all government agencies, not just thosedealing with ‘economic development’ or ‘supportfor small businesses’ (see Box 6.1).

Some policies or regulations that may havebenefits and/or costs to informal workers are notfound in budgets themselves. For example, zoningpolicies can restrict or promote the accommodationof economic activities in residential areas; urbanplanning can integrate or restrict sites for informaloperators in urban renewal plans, or exclude themaltogether; and municipal and national govern-ments can design tendering and procurement poli-cies (which will be reflected in budgets) to includeor exclude very small businesses.

In brief, informal economy budget analysislinks the rhetoric of policy to the allocation ofresources, enabling us to see assessments of thecosts and benefits of policy decisions for informalworkers. In addition, this analysis offers a methodfor integrating poverty, gender and labour marketanalysis in assessing the impact of economic andsocial policies on working poor women and men.

Targeted policiesTo help redress biases in existing policies and tocomplement existing policies, targeted policies insupport of informal workers are also needed. InIndia, for example, the Government, in consultationwith organizations of informal workers, has recentlyadopted targeted policies in support of street ven-dors and informal workers more generally. In Kenya,the Government formulated a national policy insupport of micro- and small enterprises. And inSouth Africa, one outcome of negotiations betweenlabour and Government has been the extension oflabour rights to ‘vulnerable workers’, defined asthose not covered by existing collective bargainingagreements, including agricultural and domesticworkers (see Close-up).

#2 - To Increase Assets and AccessOver the past three decades, there has been a pro-liferation of projects and programmes designed tosupport microenterprises, including microfinanceservices and business development services. Farless attention has been paid to informal wage work-ers and their need for skills, assets and competi-tiveness in labour markets.

Support to the self-employedMany of the working poor who are self-employed,both women and men, are unable to take advan-tage of new opportunities opened up by trade lib-eralization or economic growth because they lackaccess to credit, business skills or technologies,

Multi-Sectoral Approach toInformal Economy BudgetAnalysis

Statistics: Good data is a first step towards improving policies for informalworkers and enterprises. Time and money invested in data collection that focus-es on the size, composition and contribution of informal workers and enterpriseswill increase visibility.

Economic policy and employment creation: Informal workers will benefitfrom policies and allocations that support smaller rather than larger business.Special attention to and support for very small enterprises will reach poorer people and especially women.

Regulation of labour and employment conditions: Labour departments regulate conditions of work and employment. Special efforts should be made toextend the regulatory reach to include informal workers and their enterprises andto ensure labour laws are progressive with respect to the informal labour force.

Land entitlements: Budgetary allocations to land reforms that are redistribu-tive, and in which women have entitlements in their own right, will be of directbenefit to women informal workers.

Agricultural support: Support for informal and poorer workers will be reflectedin budget allocations to extension officers with an orientation to very small pro-ducers, in employment of women extension officers and in training in methodsof reaching women producers.

Communications: A telecommunications policy that supports cheaper telecom-munications will give informal workers easier access to information about mar-kets and prices, and can specifically address the exclusion of women from theinformal circuits of information-sharing and price-setting that are dominated by men.

Education: Informal workers benefit from policies that allocate resources to lit-eracy, to adult and further education and to primary and secondary educationgeared to the real world of work. Resources for affordable early childhood edu-cation can enable the mothers of young children to work, and can create signifi-cant (albeit low-waged) employment opportunities for women.

Health: Informal women workers are assisted by health services that emphasizereproductive health and are alert to occupational health and safety issues, andby services that are safe, affordable and near the place of work.

Housing: Private homes are used by millions of people, especially women, asplaces to earn a living. Allocations of land for housing development that are nearmarkets and industrial nodes, and housing subsidies for poorer people willdirectly benefit informal women workers.

Infrastructure: Water, sanitation and electricity are essential for most informalas well as formal work activities, and policies should ensure quality, accessibilityand affordability.

Transport: Governments should support affordable and accessible public and private transport so workers and their products can reach markets and work sites.

The safety and protection services: National and local policing policies that seeinformal and formal business as linked, and that are funded in a way that enablestheir safety, will help improve the general investment or business environment.

Source: Budlender, Skinner and Valodia 2004; Budlender 2000.

Box 6.1

productive assets, or market information. And self-employed women face additional problems notfaced by self-employed men, including less accessto property due to unequal inheritance laws; lessaccess to formal sources of credit due to lack ofcollateral; and fewer opportunities for apprentice-ship and skills training. They may also be treated asdependents in tax and benefit systems and con-front a lack of business development and marketingservices for female-dominated industries or sectors(Mayoux 2001).

Microfinance – Beginning in the early 1970s,there has been what has been called a ‘microfi-nance revolution’. Microfinance has shown thatpoor people are bankable – they can save regu-larly and borrow and repay loans at interest ratesat or above commercial rates of interest. At theheart of the microfinance movement the worldover are working poor women, who make uparound 80 per cent of all clients of microfinanceinstitutions. They have proved to be credit worthyand good savers and, in general, they have betterrepayment rates than men. Microfinance has ledto fundamental changes in the lives of many(though certainly not all) women, who now haveincreased access to resources, improved materi-al well-being and enhanced identity and power(Kelkar et al. 2004; Chen and Snodgrass 2001;Kabeer 1998).

In addition, women-led microfinance institu-tions such as SEWA Bank and Women’s WorldBanking (WWB) have helped push the frontiers ofmicrofinance, pioneering many of the innovativeservices and methodologies in the field. Foundedin 1974, SEWA Bank is a women’s cooperativebank in which clients – all working poor women –comprise the majority of the board. It was the firstmicrofinance institution to start as a full-fledgedbank rather than a microfinance project, and toinclude a focus on savings, not just loans; it wasalso one of the first to add insurance to its finan-cial services.

Founded in 1980, WWB is the first globalwomen’s financial institution. Its affiliates andassociates provide financial services to over 15million low-income women entrepreneurs insome 40 countries. In addition, WWB has linkedits clients, affiliates and associates to formalbanking institutions and influenced financial sec-tor policies worldwide.

Despite the importance of microfinance inrecognizing and supporting women’s economicroles, however, it should not be seen as a magicbullet for women’s economic security. To date it

reaches less than 13 per cent of the estimated550 million working poor worldwide. As differenttypes of financial institutions become involved inmicrofinance – and formal banks go into‘untapped’ markets – it is important to keep afocus on women’s participation as well as prod-ucts and services that address the needs of work-ing poor women. Equally important, the formalfinancial sector needs to develop financial poli-cies and systems that work for the poor majority

Business development services – Businessdevelopment services (BDS) are aimed at increas-ing the business skills and market access ofmicroenterprises. Those offered by governmentgenerally do not reach the smallest enterprises,especially those run by women, and while BDSprovided by NGOs have been more successful attargeting the most disadvantaged producers andtraders, they have limited outreach. More criticallyfor our purposes, few if any of these focus onworking poor women.2 This is an area in whichgovernments can play a role in facilitating serviceprovision through private firms or through public-private partnerships of various kinds.

A key issue is whether to provide genericBDS (such as preparing a business plan) or morespecific services (such as marketing specificproducts). Both are needed, but sector-specificservices are more likely to be effective for self-employed women, who tend to be concentratedin certain sectors and face a variety of sector-specific disadvantages (Chen et al. 1998).

The term ‘sub-sector’ is used to refer to eachof the tasks, enterprises and actors linked to theproduction and distribution of a particular finalproduct (e.g., silk) or commodity (e.g., vegeta-bles) along a value chain. The sub-sectorapproach to microenterprise development refersto efforts to address common constraints oropportunities facing the targeted clients – in thiscase, women micro-entrepreneurs – within agiven sub-sector. Depending on the sub-sector,common constraints might include barriers toaccessing existing infrastructure and services,poor quality – or lack – of existing infrastructureand services and unfavourable prices. As such,the sub-sector or value-chain approach typicallyinvolves more than the provision of businessdevelopment services: it often involves negotiat-ing prices, enforcing contracts and balancingpower relations within markets (ibid.). Good prac-tice examples on sub-sector development rangefrom coconut oil producers in Samoa to tradition-al medicine dealers in South Africa (see Close-up).

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2 A review of 28 evaluations of enterprise development projects that involved small or microenterprises found that, across the board, thegender impacts of projects were not addressed. At most, a few provided a breakdown of beneficiaries by sex. In addition, human andsocial dimensions did not feature in any of these evaluation approaches. The focus was almost entirely on enterprises, markets, institu-tional capacity; not on entrepreneurs, knowledge and skill acquisition. While some considered the projects’ economic and institutionalcontext, none considered their human and social context (Zandniapour et al. 2004).

Support to informal wage workersIt is important to note that virtually all businessdevelopment services and most microfinanceservices are targeted at the self-employed.Recently, some microfinance institutions havebegun to offer loans and savings products todeal with the consumption as well as the invest-ment needs of their poorer clients. These prod-ucts should continue to be extended to all theworking poor, including those who are wageemployed. The counterpart to business develop-ment services for the wage employed is work-force or human resource development services.However, to date, most of these initiatives – suchas training and retraining programmes – havefocused on formal employees in the private orpublic sector or those who have lost their formaljobs. In part for this reason, the InternationalLabour Conference (ILC) 2004 recommendedthat governments should develop policies andprogrammes aimed at “creating decent jobsand opportunities for education and training, aswell as validating prior learning and skills gainedto assist workers and employers to move intothe formal economy” (Human ResourcesDevelopment Recommendation, No. 194, adopt-ed by the ILC 2004).

#3 – To Improve the Terms of Trade For the informal self-employed, more favourableterms of trade mean more favourable prices fortheir products relative to the cost of their inputs.For informal wage workers, they mean morefavourable wages relative to their cost of living.Changing these terms of trade clearly requiresmore than service delivery. It involves changingspecific government policies, government-setprices or institutional arrangements, as well asthe balance of power within markets or valuechains.

Consider the unfavourable terms of trade forsmall farmers producing for the domestic marketin Ghana, where urban food prices are relativelyhigh while the price farmers get is relatively low(Heintz 2004), and the difference gets capturedby various intermediaries. Targeted interventionssuch as finance for storage facilities, rural-to-urban transport infrastructure or market facilita-tion services could cut out the intermediaries (orat least lower the rents they get) and improvereturns to small farmers.

At the global level, the fair trade movementseeks to promote more equitable trading relation-ships, particularly for small producers, by improvingmarket access, strengthening producer organiza-tions, negotiating better prices and supporting con-sumers to use their purchasing power to helpcounter the imbalances in international trade. TheFairtrade Labelling Organisation (FLO) provides afair trade standard, indicating that producers haveachieved the principles set out by FLO for their par-

ticular product. These principles include setting aminimum price and a creating a social premium topass back for community investment.

#4 – To Secure Appropriate LegalFrameworksWhether formal or informal, workers and entre-preneurs are entitled to respect for fundamentalprinciples and rights at work, as expressed inthe 1998 ILO Declaration of that name(www.ilo.org/declaration). Yet informal workersare often denied these basic human rights (ILO2004c). Strategies to ensure their legal rightsinclude the development, ratification andenforcement of international labour conventionsand recommendations; changes in nationallabour legislation, including extending the scopeof the employment relationship (ILO 2005a); theimplementation and monitoring of corporatecodes of conduct; and collective bargainingagreements and grievance mechanisms.

International labour standards – It is oftenassumed that international labour standards donot apply to workers in the informal economy.While some of these standards are aimed at for-mal enterprises, those that embody fundamentalhuman rights are, in principle, to be enjoyed byall workers whether they work in formal or infor-mal settings (Trebilcock 2004). To date, only oneILO convention applies to a specific category ofinformal worker: the Home Work Convention#177, passed in 1996, which has been ratified byonly four countries (see Chapter 5).

Even when they are not widely ratified orenforced, ILO conventions can be used as advo-cacy tools in promoting national policies or pro-grammes in support of informal workers in gen-eral or specific groups of informal workers. InSouthern and South-Eastern Asia, national andregional organizations of home-based workers –linked through the HomeNet network – haveused Convention #177 to lobby for supportivepolicies and programmes for home-based work-ers in their respective countries and regions.

A joint project of UNIFEM, SEWA and Home-Net South Asia seeks to ensure safe and securelivelihoods for home-based workers in theregion. Its primary objective is to assist withorganizing and networking of home-based work-ers and their organizations; ratification of the ILOHome Work Convention; supporting the develop-ment of policy frameworks and advocacy on keyissues; demonstrating pilot approaches for socialprotection; and promoting fair trade practices. Toachieve these goals, HomeNet South Asia hasbeen mapping organizations of home-basedworkers, helping to build national networks, con-sulting with relevant national ministries to advo-cate on behalf of home-based workers, dissemi-nating information and increasing the visibility of

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the national HomeNet associations throughworkshops and media (HomeNet South Asia2004).

Domestic labour laws and policies –Limitations in existing labour laws contribute tothe fact that more and more workers worldwideare not legally protected. These limitationsinclude how labour law defines and classifies theemployment relationship; how the definitions orclassifications encoded in labour law are inter-preted and applied; and whether the law, asinterpreted, is enforced or complied with. Insome cases the employment relationship isobjectively ambiguous (e.g., in the case of manyso-called ‘independent contractors’, such astruck drivers who drive their own trucks on behalfof another person or a firm). In other cases theemployment relationship clearly exists but it isnot clear who the employer is, what rights theworker has and who is responsible for securingthese rights (e.g., in the case of temporary work-ers hired through agencies). To address theseproblems as they relate to migrant workers,some governments such as those in Hong Kongin the 1970s and Jordan in 2003 have createdstandard contracts for migrant workers thatguarantee benefits and minimum wages.

However, no matter how labour law isdefined, interpreted, applied or enforced, someemployers will continue to deliberately disguise orchange the employment relationship in order toavoid their obligations as employers. They maydisguise the employment relationship, for exam-ple, by claiming that their outworkers are actuallycommercial partners who buy raw materials fromthem and sell finished goods to them. In othercases, employers seek to change existingemployment relationships through legal means toless secure and protected relationships. Forinstance, a management consultancy in SouthAfrica assists companies to restructure theirworkforces so that they no longer have to adhereto collective agreements on minimum wages orcontribute to benefit or training schemes (Skinnerand Valodia 2001). When employers deliberatelydisguise the employment relationship, workerscan and have successfully challenged this prac-tice, as in India, where several cases have goneall the way to the Supreme Court.

Codes of conduct – Globalization has led to asignificant increase in the global sourcing ofgoods, generating increased employment formany women workers in export production.However, the conditions of employment of theseworkers are often poor and lacking in basicrights. Global sourcing is often undertaken bylarge brand name companies and retailers, whodo not own production but can exert great con-trol over their suppliers. NGOs and trade unions

have put increasing pressure on large corporatebuyers to act more responsibly and improveemployment conditions within their supplychains. An important mechanism for this arecodes of conduct.

Since the early 1990s, there has been amarked emergence of these codes—voluntaryagreements drawn up at a company, industry ormulti-sector level to establish basic social or eth-ical standards. Their proliferation reflects thedecline of state regulation of transnational corpo-rations, the rise of corporate self-regulation andpressure from adverse publicity regarding poorworking conditions or environmental standards.Various players are ‘driving’ the development ofthe codes: women’s organizations, trade unions,NGOs, companies and business associations –as well as multi-stakeholder networks or initia-tives such as the Ethical Trade Initiative (ETI) (seeClose-up). However, organizations of informalworkers have generally not been actively repre-sented in the negotiations around corporatecodes of conduct (Jenkins et al. 2002).

Recently, there has been a growing focus onpublic/private partnerships between businessand the non-profit world as a way to develop cor-porate codes of conduct that businesses cansupport but that also allow monitoring of imple-mentation. Including businesses among thestakeholders increases the likelihood of imple-mentation. Public/private partnerships also pro-vide a forum for focusing on the benefits ofcodes of conduct to profit-making entities. Theserange from increased sales among consumerswho are concerned about worker conditions inproduction chains beyond their borders to morecommitted workers, less turnover and lessabsenteeism. Many companies have their owncodes, which cover issues such as health, safe-ty and child labour. However, codes can includeother rights such as union organization, wages,working hours and discrimination.

In 2004, Calvert, a socially responsibleinvestment firm; Verité, an independent, nonprof-it social auditing and research organization; andUNIFEM collaborated on a pioneering code ofconduct relating to gender equality. TheWomen’s Principles, which focus on empoweringwomen worldwide, are a set of goals for compa-nies to aspire to and measure their progressagainst. They address such issues as employ-ment and income; health, safety and violence;management and governance; and educationand training. Over the course of several years,the three entities plan to design a verificationregime for companies endorsing the principles;develop curriculum, surveys and trainingmethodologies for social compliance; and con-duct research to build a case for the financialreturn from investing in women’s empowerment.(UNIFEM 2004a).

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The better codes are based on the four prin-ciples of the ILO Declaration on FundamentalPrinciples and Rights at Work – freedom of asso-ciation and freedom from forced labour, childlabour, and discrimination – which are enshrinedin the following core ILO Conventions:

� No. 87 on freedom of association and No. 98on collective bargaining;

� No. 29 and No. 105 on forced labour;� No. 100 and No. 111 on eliminating discrimi-

nation;� No. 138 and No. 182 on child labour.

Occupational safety and health as well ashours of work are common features of thesecodes. Some codes include the more controver-sial provision that workers should receive a livingwage. This recognizes that legally set minimumwages, which are included in many companycodes, are often not adequate to meet the basicneeds of workers (Burns and Blowfield 2000).

At the international level, several hundredlarge companies have pledged to respect thefour principles encompassed in the ILODeclaration on Fundamental Principles andRights at Work under the Global Compact, an ini-tiative launched by the United Nations Secretary-General and the business community in 1999.

Labour standards and trade agreements.Despite resistance from both developing countriesand multinational corporations, labour standards(including workplace safety) have been incorpo-rated into some international trade treaties. TheNorth American Free Trade Agreement (NAFTA)and its side agreement the North AmericanAgreement on Labour Cooperation (NAALC),which went into effect in 1994, were the first for-mal attempt to do this. The NAALC does notoblige the parties (Canada, Mexico and the UnitedStates) to modify their national labour legislationbut requires them to guarantee effective applica-tion of their own legislation. It also provides aninstitutional framework to secure compliance,including a special system for dispute resolution(Lopez-Valcarcel 2002).

However, a decade after these agreementswent into effect, few if any of the labour rights ofMexican maquiladora workers have been pro-tected by the NAALC due to “inherent weak-nesses of the agreement, a lack of political will toimplement either the letter or the spirit of theagreement, and the economic disincentives forMexico to enforce labour rights that would ‘dis-courage foreign investment’” (Brown 2004, citedin Lund and Marriott 2005). None of the 28 labourstandards complaints submitted to the NationalAdministrative Offices has got beyond the sec-ond stage of a seven-step investigative processand “not a single workplace hazard has beencorrected as a result of NAFTA and the NAALC”

(ibid.). While there are clear scope, enforcementand public participation problems within theNAALC and other labour agreements within tradetreaties, the Maquiladora Health and SafetySupport Network and expert observers remainoptimistic that these can be overcome if a num-ber of essential components are incorporatedinto future trade agreements (ibid.).

Securing rights for migrant workers Women migrant workers, many of whom workinformally, are especially vulnerable to abuse andexploitation because they often have no rightswithin the country to which they migrate.UNIFEM is one of several organizations that arefocusing on empowering women migrant work-ers, informing them of their rights under interna-tional agreements and helping them to securework contracts in host countries. A UNIFEMbriefing kit, Empowering Women MigrantWorkers in Asia, includes information on severalinitiatives as follows:

Policy and legal reforms have been under-taken at local, provincial, national and internationallevels to protect workers. These include projectssuch as the successful effort, supported byUNIFEM, to mainstream gender concerns in migra-tion into Nepal’s National Development Plan (thiswas the first time that migration was discussed inthe Plan) and UNIFEM’s work in support of bringingnon-resident workers under the protection ofemployment laws in Italy and Jordan.

Organizing initiatives to provide voice tomigrant workers include the formation of theFilipino Migrant Workers Union (FMWU) and theIndonesian Migrant Women’s Union (IMWU) inHong Kong. In addition, UNIFEM has helped createpartnerships between traditional trade unions andmigrant worker unions as in the case of theIndonesian Migrant Workers Union, which receivestechnical support and shared office space from theHong Kong Confederation of Trade Unions.

Public awareness campaigns, such as a localcampaign in greater Jakarta, Indonesia, a nationalone initiated by the Nepalese Government and anAsian regional campaign supported by UNIFEM,helped raise awareness about the problems facingmigrant workers, highlighted good practices andprovided a framework for strategic intervention.

Provision of direct services to migrant work-ers which generally involves such things as travelassistance, interest-free loans and life insurance andpromoting regional collaboration between countriesof origin and countries that receive migrants. TheILO is proposing a non-binding MultilateralFramework on Labour Migration (ILO 2004b).

Securing rights for the self-employedIt should be noted that while some internationallabour laws and standards apply to self-employedworkers, these workers have specific concerns that

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differ from those of wage workers and that are oftennot covered by international standards or nationallabour law. These include the right to do their par-ticular line of work and the right to use urban spaceor common properties. The right to work isenshrined in the constitutions of some countriesand thus can be used to defend the right of occu-pational groups to do the kind of work they do. Forexample, the Supreme Court of India, in two land-mark judgements, has upheld the right of streetvendors to vend and, therefore, to a secure placefrom which to vend. These rights also include theright of access to credit, land and natural resourcesand the right to a fair share in the benefits of theirintellectual property.

Securing property rights for informalworkersPeople who own and control assets such as landand housing tend to enjoy some degree of eco-nomic security and, if they have legal rights overtheir assets, are able to use them to access cred-it and other economic resources. However, theworking poor face several handicaps in thisregard. First, many poor families own few assetsother than their labour. Those who do ownassets, often do not have legally recognizedrights to them (de Soto 2000). Finally, womenface even greater constraints since in manycountries they are far less likely than men to ownor control assets.

A mix of strategies is needed to secure prop-erty rights for poor women. First, efforts areneeded to increase the assets of the poor, suchas (a) policies to allocate land and otherresources more equitably across social groupsand (b) microfinance services to increase finan-cial assets (through savings) and physical assets(through loans). Second, efforts must be made tohelp the poor secure legal property rights to theassets that they do own, including land, housing,equipment, livestock or natural resources.Finally, efforts should be made to help womenmake claims to a share of the land, housing orother property owned by their families. In VietNam, for example recent revisions to the mar-riage and family laws require that both husbandand wife sign any documents registering familyassets, including land and property. (Ravallionand van de Walle 2004; Posterman and Hanstad2003).

#5 – To Address Risk and UncertaintyWith the global expansion of informal employ-ment, the number of workers who do not haveemployment-based protections such as healthor unemployment insurance, retirement or dis-ability benefits has grown markedly. A healthcrisis, for example, can plunge a family intopoverty and keep it there. Meanwhile, trade lib-eralization brings new risks and vulnerabilities,

such as less-secure contracts and work orders,at the same time that governments in manycountries have reduced social spending. Thereis, in brief, a real crisis in social protection forthe global workforce.

A common policy prescription to addressincome insecurity in the informal economy ispublic works programmes (World Bank 1995).One of the best-known and respected is theEmployment Guarantee Scheme in Maharashtrastate, India. This is unique in that it not only guar-antees gainful employment for all adults above18 years but also requires that this employmentcontribute to building productive communityassets. It has been successful in generating sig-nificant employment, especially for women, andin creating productive community assets includ-ing temporary dams to conserve water, pavedroads and more (Krishnaraj et al. 2003). A draftnational Employment Guarantee Act, whichwould mandate the provision of a minimum of100 days of work to poor households, is current-ly being debated in India (Dreze 2005).

But public works, important as they are, arenot enough to protect informal workers, whoneed additional social protection measures suchas relief payments or cash transfers; health,property, disability and life insurance; and pen-sions or long-term savings schemes.Governments, the private sector, NGOs, tradeunions and other membership-based organiza-tions can all play active roles in providing socialprotection to informal workers. Although informalworkers are able to contribute, they should nothave to bear sole responsibility.

Around the world, a wide range of alternativemanagement and financing arrangements forproviding social protection to informal workershave been put successfully in place. Theseinclude:

� mutual health insurance schemes: for exam-ple, in Mali, Senegal and other countries.

� voluntary self-insurance schemes financedthrough premiums: e.g., integrated socialsecurity of SEWA in India (see chapter 5).

� voluntary insurance schemes financedthrough worker and state contributions: forexample, voluntary health and pensionscheme for informal workers in Costa Rica (seeClose-up).

� means-tested government-funded pen-sions: for example, old-age pensions for agri-cultural workers with incomes below thepoverty line, such as the Rural SocialInsurance Scheme in Brazil that extends pen-sions and disability insurance to the rural poor.

� universal health insurance or pensionschemes: e.g., the national scheme in Japanthat provides health insurance and pensions formore than 90 per cent of the population; the

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South African pension scheme for the elderlypoor; and the 30-baht health scheme inThailand (see Close-up).

� schemes funded by contributions from bothemployers and workers: e.g., the extensionof South Africa’s Unemployment Insurance Actto cover domestic workers.

� extension of existing statutory schemes:e.g., the extension of the statutory social secu-rity system in Portugal to cover home-basedembroiderers on the island of Madeira for oldage, disability, maternity and sick days.

� schemes financed by taxes on industries:e.g., welfare schemes in India for informalworkers in specific sectors (see Close-up).

Recently, the ILO has launched a GlobalCampaign to extend social security to all and pro-posed a Global Social Trust (see www.ilo.org/pro-tection).

Finally, in designing services for informalworkers, it is important to note that it may notmake sense to apply policies from the formal sec-tor without reframing them to fit the reality of infor-mal employment or making them more inclusive toinclude informal workers. In the case of occupa-tional health and safety (OHS), for example, ensur-ing OHS protections for both formal and informalworkers would require a multi-layered responsethat includes collecting comprehensive data onwork-related health and safety; extending the defi-nition of ‘place of work’ to include informal worksettings; broadening the conceptualization ofworker vulnerability to include issues affectinginformal workers such as long hours and intensepace; and recognizing and reframing the interde-pendent links between public, environmental andoccupational health so that all three sectors canwork together to benefit each other (Lund andMarriott 2005).

In Thailand, HomeNet, the Ministry ofLabour and the ILO have joined forces to trainhome-based workers to recognize and deal withhazards they face while carrying out their tasks.They are using the WISH (Work Improvement forSafe Homes) methodology, which uses graphicsto demonstrate safety and health concerns sothat illiterate workers can participate. The womeninvolved have organized to lobby the governmentfor primary health-care units at the local level andto obtain further technical support. The ILO hasrecently introduced the WISH methodology inother countries, such as Viet Nam (AnneTrebilcock, personal communication, 2005).

#6 - To Strengthen RepresentativeVoice and Increase VisibilityTo advocate effectively for policies and pro-grammes that address poverty and increase gen-der equality, the working poor, especially poorwomen must organize to strengthen representa-

tive voice beyond the local level to all levels ofplanning and policy-making. Recent internationalinitiatives to combat poverty such as MDGs andPRSPs, have opened up political space for infor-mal workers involvement in the developmentprocess. Taking advantage of this space, how-ever, is difficult for informal workers with limitedresources and capacity for advocacy beyond alocal agenda. It requires creative and sustainedlinkages between women’s and social justiceorganizations and trade unions, along with gov-ernments and UN partners, such as UNIFEM,UNDP and ILO.

For informal workers to become visible topolicy makers, however, also requires the collec-tion and application of better data and statistics.As this report has highlighted, relatively fewcountries have comprehensive statistical data onthe informal economy and fewer still have dataon the links between informal employment, gen-der, and poverty. Therefore, more countries needto include statistics on informal employment intheir national labour force surveys, and countriesthat do so already need to improve the quality ofstatistics they collect. Expanding the collectionand improving the quality of data on the varioustypes of informal employment will facilitate futureresearch on the linkages between informalemployment, gender and poverty, as well asmore informed policy decisions at the local,national and international levels.

Gender assessments and MDGsThe participatory processes mandated in thepreparation of national MDG reports and PRSPsprovide the opportunity to advocate for and pro-vide improved data on women’s role in the infor-mal economy. In partnership with other interna-tional, regional and national organizations,UNIFEM has played a lead role in preparing gen-der assessments in Cambodia and in severalcountries in Latin America that can be used toadvocate for a gender and employment focus innational planning related to the MDGs and morebroadly.

These reports can sensitize and train offi-cials on how to mainstream gender and employ-ment in national planning around the MDGs, thePRSPs as well as national development objec-tives. They also provide a guide to women’sgroups showing how they can frame their ownadvocacy efforts within the MDG framework — inthis way bringing women’s voices into MDG-related processes at the national level. Futureassessments can draw on both the proposednew employment indicators for MDG Goal 3 –employment by type and earnings – and informaleconomy budget analysis to assess the impactof economic and social trends on different seg-ments of the labour market and their effect onpoverty and gender.

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Following are the six strategic priorities that requiretargeted interventions in order to promote economicopportunities, economic rights, social protection andrepresentative voice for the working poor, especiallywomen, in the informal economy.

Strategy # 1 – To Create a FavourablePolicy EnvironmentThe economic policy environment needs to supportthe working poor in the informal economy, ratherthan be blind to them or biased against them. Thisrequires addressing biases in existing policies anddesigning and implementing targeted policies.

National policy on street vendors, India. The overar-ching objective of this policy is to provide a supportiveeconomic environment for street vendors while limitingcongestion and maintaining standards of hygiene inpublic spaces. Jointly drafted by the Government ofIndia and the National Association of Street Vendors(NASVI), the policy was officially adopted in early 2004with specific provisions in the following areas:

� Legal: Vendors will be given legal status byamending, enacting, repealing and implementingappropriate laws and providing legitimate hawkingzones in urban development/zoning plans.

� Space: Arrangements will be made for the appro-priate use of identified space, including creatingspecial hawking zones.

� Regulation: Instead of numerical limits for licensingvendors, the Government will move to fee-basedregulations.

� Role in urban trade: Street vendors will be treatedas a special component of the urban develop-ment/zoning plans by being recognized as anintegral and legitimate part of the urban tradingsystem.

� Organization: Organizations of street vendors suchas unions, cooperatives and associations will bepromoted.

� Participation: Participatory mechanisms for orderlyconduct of urban vending will be created, withjoint representation from vendors’ organizations,voluntary organizations, local authorities, the policeand residents’ welfare associations.

� Social security and financial services: Social securitybenefits (pensions, insurance, etc.) and access tocredit will be encouraged through vendor self-helpgroups, cooperatives and microfinance institutions.

� Rehabilitation of child vendors: Various measureswill be adopted to promote a better future for childvendors by making appropriate interventions fortheir rehabilitation and schooling. (Government ofIndia, Ministry of Urban Development and PovertyAlleviation 2004)

National and local policies for micro- and smallenterprises, Kenya. The Government of Kenya has formany years incorporated the informal economy into its

national economic planning, focusing on areas such ascredit, training and marketing services to micro andsmall enterprises (MSE) and government procurementfrom the MSE sector. A recent strategic plan for eco-nomic recovery notes the importance of this sector increating employment and seeks to provide infrastructureand services to it while receiving taxes in exchange. Anumber of policies relating to the informal economyhave also been adopted by local governments, mostnotably a Single Business Permit that simplifies the pro-cedures for registering businesses. In several cities andtowns around the country, suitable locations for streetvendors are under review, and informal transport opera-tions are being encouraged to coordinate their opera-tions (Winnie Mitullah, personal communication, 2005).

New Labour Act, Ghana. In a review of national labourlaws, the Ghana Trade Union Congress (GTUC) foundthat the laws were outdated, fragmented and did not fitwith work realities or the Ghanaian Constitution. Theresulting New Labour Act (2003) was negotiatedthrough a tripartite process involving the Government,trade unions and employers. The Act applies to allworkers (excluding armed forces, police, etc.). A keyobjective of the GTUC was to extend to informal work-ers important protections that formal workers hadsecured for themselves. The Act allows temporary andcasual workers to benefit from provisions of collectiveagreements on equal pay for work of equal value,access to the same medical provisions available to per-manent workers and a full minimum wage for all days inattendance and public holidays. In addition, a tempo-rary worker employed by the same employer for a con-tinuous period of six months or more must be treatedas a permanent worker (Owusu 2003; Kofi Asemoah,personal communication, 2004).

Strategy # 2 - To Increase Assets and Access To be able to take advantage of the opportunitiesoffered by a more favourable policy environment, theworking poor need greater market access and the rele-vant assets and skills for competing in markets.

Export links for coconut oil producers, Samoa.While the Samoan economy overall has out-performed its Pacific neighbours, the rural economy ofthis small island country has lagged far behind, result-ing in migration to urban areas. In response, Women inBusiness Development Incorporated (WIBDI), aSamoan NGO, has introduced technological improve-ments to better enable rural women to tap into exportmarkets. While WIBDI has supported a range of proj-ects, including organic farming, beekeeping and handi-craft production, perhaps its most innovative projecthas been its work on virgin coconut oil production. Itintroduced an innovative, small-scale processingmethod and trained rural women to produce virgincoconut oil suitable for export. The oil resulting from thenew processing method is not only of higher quality but

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Training facilities have also been expanded. Giventhe long growing time needed for many medicinalplants and the need to generate sustainable liveli-hoods, the pilot farms also produce seedlings forsubsistence food crops as well as landscapingplants that the municipality has agreed to buy.

The municipality has also invested substantial fundsin research and development of traditional medicine inpartnership with the Traditional Healers Organization, theMedical Research Council, the Nelson Mandela Schoolof Medicine at the University of KwaZulu Natal and theRegional Biotech Innovation Centre. The intention is todevelop home-grown, patented, mainstream preventiveand curative medicines. A feasibility study is exploringthe potential of a public-private economic empower-ment partnership to invest in a processing facility, to pro-tect indigenous knowledge and to process, packageand market traditional pharmaceutical products for boththe national and international markets (Institute forNatural Resources 2003; Mander 1998; Fred Pieterson,personal communication, 2005).

Strategy # 3 – To Improve the Terms of Trade To compete effectively in the markets, the workingpoor need to be able to negotiate favourable pricesand wages for the goods and services they sell, rela-tive to their cost of inputs and their cost of living

Gum collection and marketing, India. In the state ofAndhra Pradesh, the Chenchu people, a hunter-gatherertribe, collect gum and other forest products. In June2002, UNIFEM and the NGO Society for the Eliminationof Poverty launched a project in partnership with a localNGO, the Kovel Foundation, to support the Chenchu incollecting gum, bark, seeds and other non-timber forestproducts. The main innovations in this project includetraining both women and men in sustainable collectionand processing methods and the organization ofwomen’s groups to run community-based procurementcentres. These centres buy products collected by theChenchu and sell them to the state government forestcorporation or on the open market. Previously, the localcommunity was unaware of the quality or price of whatthey sold and were often cheated by private traders orgovernment officials. The pilot project, which startedwith one product in one district, has expanded to covernearly 60 products and 17 districts in Andhra Pradesh. Ithas shown that rural women, empowered by marketknowledge and collective solidarity, can perform well inthe market place (Meenashki Ahluwalia, personal com-munication, 2005).

Buy-back centres for waste collectors, South Africa. In South Africa, waste collectors are predominantlyvery poor black women and, increasingly, male immi-grants from other African countries. In the mid 1990sthe Self Employed Women’s Union (SEWU) beganorganizing women cardboard collectors in the innercity of Durban/eThekwini. The union found that thewomen were largely innumerate and often exploited byunscrupulous middlemen. It lobbied for assistancefrom the local government, which responded by help-ing to build a buy-back centre in the inner city. The

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05it can be produced within a much shorter time periodthan previous techniques. The processing method isalso less labour intensive. WIBDI has established thePure Coconut Oil Company to market and export thevirgin oil on behalf of the villagers and assists with qual-ity control (Cretney and Tafuna’i 2004).

Upgrading the supply chain for dairy producers,Nicaragua. In Nicaragua, the United Nations IndustrialDevelopment Organization (UNIDO) worked with localpartners through its Women’s EntrepreneurshipDevelopment (WED) programme to analyse and upgradea dairy production chain. The analysis identified bottle-necks in the stages of production, which the collabora-tive programme then addressed through a mix of inter-ventions: lobbying the Government to introduce technicalstandards for handling fresh milk and processing milkproducts; establishing a cooperative to improve the sup-ply of milk to cheese producers; establishing a laboratoryfor quality assurance; creating a technical service centrefor the producers; and establishing links with large enter-prises outside the production chain for distribution, salesand technology. The programme also helped form theNicaraguan Chamber of the Milk Sector and a Milk-Cluster Commission in cooperation with the NationalProgramme for Competitiveness and the Milk Federationof Central America (Tran-Nguyen and Zampetti 2004).

Traditional medicine support programme, SouthAfrica. A significant component of the informal econo-my in South Africa is the traditional medicine (or muthi)sector, which is utilized by 80 per cent of black SouthAfricans, often in parallel with modern medicine. It isestimated that 61 million rand (approximately US$8.7million) of medicinal plant material is traded in KwaZuluNatal annually, with Durban/eThekwini the primarytrading and dispensing node. Over 30,000 people,most of whom are women, work in this sector, mainlyas rural gatherers. The volume and value of muthitransactions convinced the Durban/eThekwini CityCouncil to develop a broad range of interventions tosupport this sector. In consultation with traders, tradi-tional health practitioners, cultivators, farmers, variousresearch institutions and private sector companies, theCouncil has initiated and facilitated support strategiesacross the traditional medicine value chain.

A market building that can accommodate 550stallholders has been developed to support the retaillevel, with shelter, storage, water and toilet facilities.The building, which now includes consultation boothsand a processing plant, has significantly improved theworking environment for traders.

The Council supports environmental sustainabili-ty by training gatherers in sustainable harvestingtechniques. This has led to the establishment of asustainable bark harvesters association, the firstorganization of its kind in South Africa. It also sup-ports a medicinal plant nursery that producesseedlings for farmers and trains traditional healers ingrowing methods. Since the nursery alone wasunable to meet the demand for medicinal plants, fivelabour-intensive pilot nurseries and small farms havebeen established across the municipality since 2004.

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municipality provided a small plot of land for thecentre, while a large private sector recycler providedscales, storage containers and trolleys for the collec-tors. SEWU worked alongside city officials to designthe intervention and trained the cardboard collectors inweights and measurements. The collectors now selltheir cardboard directly to the recycling company,which has substantially increased their (albeit still low)incomes. The success of this buy-back centre has ledthe Municipal Council to establish a number of similarcentres throughout the city (Mgingqizana 2002).

Improved terms of trade for a cocoa bean coopera-tive, Ghana. A UK fairtrade organization (Twin Trading)joined with an NGO in the Netherlands (SNV) to assistKuapa Kokoo, a cocoa bean cooperative in Ghana, tojoin the cocoa producers’ register of the FairtradeLabelling Organization (FLO). This enables the 45,000producers in the cooperative – a third of whom arewomen – to market to importers and chocolate com-panies who wish to buy under fair trade conditions,and it also gives smallholders a guaranteed fair priceplus a premium of $150 per ton. The premium is usedby cooperative members to invest in community devel-opment projects, many of which are priorities forwomen, such as wells, corn mills and schools. In addi-tion, the cooperative has established the DayChocolate Company as a joint venture in the UK thatmarkets its own brand of chocolate to retailers. Thecooperative provided 33 per cent of the company’sequity and receives 66 per cent of the profits (Tiffin etal. 2004; Redfern and Snedket 2002). The cooperativeis now the fifth largest licensed cocoa buying companyin Ghana, which means it can negotiate with theGovernment to set fair prices for the crop. Twin Tradinghas also assisted the cooperative to obtain funds toset up a credit union, which has turned out to be asource of security during the lean season betweencocoa harvests (Tiffin et al. 2004).

Strategy # 4 – To Secure Appropriate LegalFrameworksThe working poor in the informal economy need legalrecognition as workers and the legal entitlements thatcome with that recognition, including the right to work(e.g., to vend in public spaces), rights at work (i.e.,workers’ rights) and rights to property.

Women’s land rights in Central Asia. Central Asiais considered the poorest area in the Commonwealthof Independent States (CIS) region, with lack of landa major reason for poverty. The majority of the popu-lation in both Kyrgyzstan and Tajikistan, whereUNIFEM is working on initiatives to increasewomen’s land rights, live in rural areas and earn theirlivelihood through agricultural work. In both coun-tries, Government initiatives aimed at reducingpoverty through land reform have been introduced,but women have not benefited as much as men bothbecause of a widespread belief that women shouldnot own or inherit land and limited awareness amongwomen about their economic rights. To ensurewomen’s land rights, UNIFEM is working with the

Governments, civil society and women’s groups toraise awareness and amend laws. In Tajikistan,amendments to the land reform act that improvewomen’s access were signed into law in 2004. InKyrgyzstan, UNIFEM has supported the work of legalexperts in drafting and submitting to the Governmentamendments to the existing land code, and has cre-ated training programmes to build awareness andnegotiating skills among women at the local level(UNIFEM 2004b).

National Union of Domestic Employees (NUDE),Trinidad and Tobago. Initially established in 1982 toorganize domestic workers, NUDE began includingother low wage workers who had no protections orguaranteed benefits in 1992. As of 2002, the union had450 members – 65 of whom were men – and an all-female executive. The union has been campaigningagainst discrimination against domestic workers inlabour legislation and to have women’s houseworkcounted in the national budget. It has hosted meetingson domestic workers’ issues that have brought togeth-er unions, NGOs, Government agencies, UN agencies,universities and individual researchers and has con-vened meetings of domestic workers’ organizations atthe Caribbean regional level to define commondemands (Global Labour Institute 2003).

Ethical Trading Initiative, United Kingdom. TheEthical Trading Initiative (ETI) in the UK is an inde-pendent multi-stakeholder initiative that supportslabour codes. It involves companies, trade unionsand NGOs and has developed independent labourcodes for informal workers based on core ILOConventions. The ETI has brought together over 35companies with NGOs and trade union federations insupport of the ETI Base Code, which must be includ-ed as a minimum in the codes of member companies.The ETI has a number of working groups that sharelearning and information on how to advance the codeand work with local stakeholders – including home-worker – in developing countries. A similar initiative inthe US, Social Accountability International (SAI), pro-vides an auditable standard, SA 8000, against whichcompanies can be certified as compliant. (StephanieBarrientos, personal communication, 2005)

Application of ETI Base Code, South Africa. MostUK supermarkets are members of the ETI. Thismeans, for example, that wine and fruit growers inSouth Africa producing for the UK market understandthat they need to comply with UK labour legislationand the code. Improved labour standards have led tobetter conditions for some women workers, especiallythose with permanent contracts. However, under com-petitive pressure to keep costs low, some growers areswitching from permanent labourers to temporaryones, making it easier to avoid providing employmentbenefits, and conditions for these workers are oftenquite bad. The lack of union organization among ruralworkers in general and women in particular makes itdifficult for workers to address these conditions(Barrientos et al. 2004).

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Strategy # 5 – To Address Risk and UncertaintyThe working poor need protection against the risks anduncertainties associated with their work as well as thecommon contingencies of property loss, illness, dis-ability and death.

Government-initiated voluntary scheme for healthand pension provision for informal workers, CostaRica. An increasing proportion of Costa Rica’s labourforce is not covered by occupationally related socialinsurance. However, voluntary insurance is available forindependent workers, own account workers and non-remunerated workers (family workers, housewives andstudents). It is aimed at workers who have either nevercontributed to a health or pension plan or who did notdo so for long enough to accumulate adequate bene-fits. Workers may join the plan if they have a per capitafamily income lower than a basic basket of food prod-ucts, as determined by the Statistics Institute. Althoughjoining has been voluntary, it is becoming statutory in2005. The plan is funded by contributions from theState and the individuals who join. This is an interestingexample of a country with a good history of social pro-vision attempting to adjust in flexible ways to increasingnumbers of informal workers in the labour market (Lund2004, drawing on Martinéz and Meso-Lago 2003).

Government sponsored social protection, Thailand.The formal contributory social security scheme inThailand covers sickness, disability, death and survivorgrants, maternity benefits for 90 days, old age pensionsand child allowances. In the late 1990s and early 2000s,it covered only about 15 per cent of the workforce,mostly formal workers. Plans to extend the social insur-ance scheme to informal workers were actively underreview in mid-2005. Apart from this scheme and addi-tional programmes covering pensions and health carefor civil servants, the Government of Thailand has devel-oped voluntary subsidized health cards for those notcovered by the formal scheme and labour protectionlaws. To provide universal health coverage within 10-15years, it has instituted a ‘30 Baht Health Scheme,’ inwhich poor people pay a minimal co-pay (30 baht isapproximately US$0.75) for health care and theGovernment funds the rest of the costs through taxation(Lund and Nicholson 2003). This plan has become thebasic social protection scheme in Thailand, coveringsome 47 million people out of a total population of 62million (Rakawin Lee, personal communication, 2005).

Industry-specific welfare funds for informal work-ers, India. In India, the Government has set up anumber of welfare funds for workers in specificindustries. These funds are created by special Actsof Parliament. For example, the Building and OtherConstruction Workers’ (Regulation of Employmentand Conditions of Service) Act was passed in 1996.Unlike previous legislation, this bill extended cover-age to small construction sites that employed as fewas 10 people in a 12-month period. The law requiresbuilders to issue identity and attendance cards toworkers, create a welfare fund, provide insurance

coverage, pay medical expenses and pay minimumwages. Building sites with more than 50 workers arerequired to set up crèches for workers’ children.

The Cigarette (Bidi) and Cigar Workers(Conditions of Employment) Act, also from 1996,expanded the definition of ‘employee’ to those whowork under the ‘sale-purchase system’ (i.e., theworker buys raw materials and sells finished goodsto a trader or contractor) and created a national mini-mum wage to be adopted by all states in India. TheBidi Workers Welfare Tax Act generates welfare fundsfor bidi workers, 90 per cent of whom are women.(Jhabvala and Kanbur 2002; Subrahmanya 2000).

Strategy #6 – To StrengthenRepresentative Voice and IncreaseVisibilityTo advocate effectively for supportive policies andprogrammes, the working poor, expecially women,need to be organized and gain representative voicein all levels of planning and policy-making. To haveinformed policy and action, the working poor in theinformal economy must be ‘visible’ in national statis-tics. Therefore, greater priority needs to be given tothe collection of data on informal employment.

Working with internal migrant women workers,China. The Chinese Working Women Network(CWWN) is a non-profit NGO, whose mission is to bet-ter the lives of Chinese migrant women workers byhelping them fight for labour rights in China’s exportprocessing zones. Because of difficulties organizingmigrant workers in the workplace, CWWN organizesthrough local communities and dormitories for migrantwomen. It builds labour networks and encourages col-lective action among the women CWWN also runsorganizing and training centres to help women take onleadership roles, a mobile health centre, a communityoccupational health centre, a support group for injuredworkers, and a women workers’ cooperative for eco-nomic activities (Ngai 2005).

Developing statistics on the informal economy,Moldova. Moldova, in common with other transitioncountries, has seen a rise in informal employmentboth inside and outside the informal sector (i.e.,small unregistered enterprises) as they shift to a mar-ket economy. As a result, statistical data, particularlygender-disaggregated statistics on the informaleconomy, have become increasingly necessary to aidpolicy makers in creating appropriate policies. Inresponse to this, a collaborative project was devel-oped between the Department for Statistics andSociology of the Republic of Moldova, the NationalInstitute of Statistics and Economic Studies ofFrance and the ILO. The project has cleared up mis-understandings about the concept of informality andits activities, collected and disseminated gender-dis-aggregated statistics in quarterly reports, and servedas an example to a number of countries that seek toreplicate the Moldovan process (ILO Bureau ofStatistics 2004).

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The Way ForwardSuch an approach requires a major reorientationof economic thinking, economic planning, andeconomic policies. The global community needsto recognize that that there are no short-cuts toreducing poverty and gender inequality; and thateconomic growth alone – even if supplemented bysocial policies to compensate the losers – cannoteliminate poverty and inequality. The global com-munity needs to set more and better employment– especially for working poor women and men – asa core priority and target of all economic policies.It should also recognize that economic policiesthat are narrowly focused on inflation-targeting,such as those promoted by the IMF and the WorldBank, can create an economic environment that ishostile to an expansion of more and betteremployment opportunities. Successful implemen-tation of the policy framework proposed herewould require adjustment in the focus and targetsof the economic policies promoted by these insti-tutions and, therefore, adopted by many nationalgovernments.

As part of this reorientation, the greater focuson employment proposed here should be incorpo-rated into national poverty reduction and develop-ment strategies, including the national MDGreports and PRSPs. The fact that employmentcreation is neither one of the MillenniumDevelopment Goals, nor an indicator under thegoal of eradicating extreme poverty and hunger isreflected in the relative neglect of employment inmost of the national MDG reports as well as thePRSPs. Even in those PRSPs that include a focuson employment, the role of informal employmentand women’s employment in poverty reductionreceive scant attention.

Improving the employment content of thenational MDG reports, PRSPs and other nationalpolicies requires four broad interventions. First,employment must be regarded as a target initself, not as a by-product of growth and invest-ment. Second, national economic plans andmacroeconomic management must support theultimate objective of generating employment forpoverty reduction. This requires a coherentemployment policy framework within the policydocuments. Currently, such policy coordinationis absent. Third, strategies must be devised toinsure that poor and disadvantaged groups, par-ticularly women, have access to the improvedemployment opportunities generated by therevised policy approach. That is, policies must beput in place to create employment opportunitiesand labour markets that work for the poor anddisadvantaged, particularly women: as detailedin strategies # 2 to 5 in this chapter. Finally, the

policies that are put in place must provideresources to improve labour market data in orderto make monitoring and implementation ofemployment policies possible.5

To ensure that these four broad interventionsare effectively pursued requires policy coherence

5 For a detailed discussion of how the employment content of the Ghana Poverty Reduction Strategy (GPRS) could be strengthened, seeHeintz (2004).

National Gender Assessments:The MDGs, National Planning and Gender

Latin AmericaUNIFEM and ECLAC commissioned six gender assessments - in Bolivia,Colombia, Ecuador, Nicaragua, Peru and Venezuela - to analyse the MDGs froma gender perspective. Each report analysed national statistical data using acommon framework, in which gender equality was regarded both as an end initself, and as a requirement for meeting all of the other goals. The reports con-sidered employment as a determining factor in achieving Goal 1, the eradicationof extreme poverty and hunger:

The areas of employment and social protection, among others, are funda-mental to determine standards of living in our region, in which under-employ-ment, precarious work, prevalence of the informal sector, almost absoluteabsence of social safety nets to protect against unemployment and insuffi-cient income are widespread phenomena (ECLAC 2002).

The reports present indicators in addition to those now specified for inter-national monitoring of progress toward achieving the MDGs. These include dataon the links between gender inequality and different dimensions of poverty,including: access to the labour market and forms of employment, remunerationin employment, the contribution that women make to reducing poverty.

The UNIFEM-ECLAC Peru report, “Las Metas del Milenio y la Igualdad deGénero: El Caso de Peru” was launched jointly with UNDP in a public session ofthe Peruvian Congress which had the effect of informing civil society as well asstrengthening UNIFEM-UNDP collaboration (ECLAC 2004b). It was used to pre-pare a national report on the implementation of the MDGs. Numerous copieswere printed to use as national advocacy material and for use in several work-shops being held with the national women’s organization, Flora Tristan, through-out the country.

CambodiaA Fair Share for Women: Cambodia Gender Assessment is the result of severalyears of collaboration between UNIFEM and UN partners in cooperation with theMinistry of Women’s and Veteran’s Affairs of Cambodia (UNIFEM et al. 2004).The assessment is based on information on gender issues collected as part ofnational economic and social planning, specifically in connection with theNational Poverty Reduction Strategy (NPRS) report, national planning to achievethe MDGs as well as on economic empowerment, livelihood and employment.Extensive data are reviewed and recommendations are included on gender andnational policies, including those related to putting in place mechanisms to collect and analyse gender-responsive information as part of the monitoringprocess for both the NPRS and the MDGs.

Employment issues feature prominently in both the analysis and recom-mendations, which include attention to the role of women in agriculture and thesex industry. The gender assessment led to the formulation of policy briefs toguide policy makers and other officials in addressing gender dimensions in theirrespective sectors.

Box 6.2

at all levels and the concerted action of a rangeof players. At the international level, internation-al trade and finance institutions need to operatein accordance with widely agreed-upon UN com-mitments, including the MDGs. Also, the inter-national institutions overseeing national MDGand PRSP processes, including the UNDP andthe World Bank, need to coordinate their efforts.At the national level, this means that existingefforts to harmonize MDG and PRSP processes– including making the policy goals and monitor-ing indicators of national PRSPs and MDGreports more consistent - need to be maintainedand intensified. It is also important that thenational policies of specific countries are coher-ent: this requires accountability for progresstowards shared goals as well as inter-depart-mental coordination. Also, private firms need tooperate in compliance with widely-agreed uponUN commitments as well as national policies,including the recommendations of national MDGreports and PRSPs. Finally, organizations ofinformal workers, women, and other disadvan-taged groups need to participate in internationaland national policy processes to ensure that thepolicies that are put in place are responsive totheir needs as workers.

In sum, promoting decent work for the workingpoor, both women and men, is a key pathway toreducing both poverty and gender inequality. Thisrequires re-inserting employment on the povertyreduction and development agenda. Specifically, itrequires:

� creating more and better employment opportuni-ties

� creating incentives for informal enterprises toregister and for employers to extend benefits toworkers

� increasing the returns to labour of those whowork in the informal economy

However, reorienting policies, planning, andpractices towards creating more and betteremployment will not be possible unless two pre-conditions are met. First, the visibility of workers– especially working poor women and men – inlabour force statistics and other data used in for-mulating policies needs to be increased. Second,the representative voice of workers – especiallyinformal workers, both women and men – in theprocesses and institutions that determine eco-nomic policies and formulate the ‘rules of the(economic) game’ needs to be increased. Thisrequires pursuing an inclusive development poli-cy process that promotes the participation of thepoor, both men and women, as workers: that is, aworker-centred policy process.

Core PrioritiesWhat is needed is a critical mass of institutions andindividuals at all levels to work together on a coreminimum set of interventions and to move forwardin a collaborative and incremental way towards thebroader strategies and goals outlined above.

We recommend that UNIFEM and the UN sys-tem more generally pursue the following core prior-ities to promote decent work for working poorwomen:

Core Priority # 1 - To promote decent employ-ment for both men and women as a key pathway tocombating poverty and gender inequality. A con-certed effort is needed to ensure that decentemployment opportunities are viewed as a targetrather than an outcome of economic policies,including national MDG strategies and PovertyReduction Strategies.

Core Priority # 2 - To increase visibility of infor-mal women workers in national labour force statis-tics and in national gender and poverty assess-ments, using the employment by type and earningsindicators proposed for Millennium DevelopmentGoal 3.

Core Priority #3 - To promote a morefavourable policy environment for the workingpoor, especially women, in the informal economythrough improved analysis, broad awareness build-ing and participatory policy dialogues.

Core Priority # 4 - To support organizationsrepresenting women informal workers and helpthem gain effective voice in relevant policy-makingprocesses and institutions.

In conclusion, this report shows that workersin the informal economy, especially women, havelower average earnings and a higher poverty riskthan workers in the formal economy. The meagrebenefits and high costs of informal employmentmean that most informal workers are not able towork their way out of poverty. In the short term, theyare often forced to ‘over-work’ to cover these costsand still somehow make ends meet. In the longterm, the cumulative toll of being over-worked,under-compensated and under-protected on infor-mal workers, their families, and their societiesundermines human capital and depletes physicalcapital.

So long as the majority of women workers areinformally employed, gender equality will alsoremain an elusive goal. Progress on both of thesegoals therefore demands that all those committedto achieving the MDGs, including the UN system,governments and the international trade andfinance institutions, make decent employment apriority – and that corporations be made moresocially responsible. Informal workers, both womenand men, organized in unions, cooperatives orgrassroots organizations, are ready to partner withthem in this vital endeavour.

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Martha Chen is a Lecturer in Public Policy at theKennedy School of Government and Co-ordina-tor of the global research policy network Womenin Informal Employment: Globalizing andOrganizing (WIEGO). An experienced develop-ment specialist, she received a Ph.D. in SouthAsian Regional Studies from the University ofPennsylvania and lived and worked for 15 yearsin Bangladesh and India. She lectures and writeswidely on gender and poverty alleviation, with afocus on issues of employment and livelihoodsand is the author, most recently, of MainstreamingInformal Employment and Gender in PovertyReduction (co-authored with Joann Vanek andMarilyn Carr), Women and Men in the InformalEconomy: A Statistical Picture (co-authored withJoann Vanek) and Perpetual Mourning:Widowhood in Rural India.

Joann Vanek is the Director of the StatisticsProgramme of WIEGO. She worked with theUnited Nations Statistics Division for 20 years,where she led the development of the genderstatistics programme and co-ordinated produc-tion of three issues of the global report, TheWorld’s Women: Trends and Statistics. Her mostrecent publications include MainstreamingInformal Employment and Gender in PovertyReduction (co-authored with Martha Chen andMarilyn Carr), and Women and Men in theInformal Economy: A Statistical Picture (co-authored with Martha Chen), which was preparedfor the 2002 International Labour Conference.

Francie Lund is an Associate Professor at theUniversity of KwaZulu Natal in Durban, SouthAfrica, School of Development Studies. CurrentlyDirector of the Social Protection Programme ofWIEGO, she specializes in social security,analysing the effects of different forms of socialassistance on poor households. She chaired theLund Committee on Child and Family Supportwhich was convened after the transition todemocracy in 1994.

James Heintz is an Assistant ResearchProfessor at the University of Massachusetts atAmherst. He has written widely on economicpolicy issues, including job creation, globallabour standards, macroeconomic strategies,and investment behaviour. He has been a con-sultant for the International Labour Organizationand the United Nations DevelopmentProgramme in Ghana and South Africa, focusingon employment-oriented development policy.

Renana Jhabvala has worked with the SelfEmployed Women’s Association (SEWA) since1977 and is currently SEWA’s National Co-ordi-nator and Chairperson of SEWA Bank and SEWABharat. She serves as a policy adviser to, and amember of the steering committee of WIEGO.Her recent publications include InformalEconomy Centrestage: New Structures ofEmployment (co-edited with Ratna M. Sudarshanand Jeemol Unni), and The Unorganised Sector:Work Security and Social Protection (co-editedwith R.K.A. Subramanya).

Christine Bonner is the Director of theOrganization and Representation Programme ofWIEGO. She has spent 30 years working in andwith the labour movement in South Africa. Shewas founding Director of the DevelopmentInstitute for Training, Support and Education forLabour (DITSELA) focusing on trade union edu-cation and organizational development.

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IndexBusiness development services, 12, 92, 93-94

Caste identity and work, 23, 33, 65, 67, 72, 81

Causal wage workers, see Employment status

Child care, 12, 25, 28, 29, 30, 64

Codes of conduct, 12, 67, 85, 94, 95

Community volunteer work, 23, 31

Cooperatives, see Member-based organizationsof informal workers

Decent workILO definition of, 19for informal workers, 8, 15, 73, 84, 87, 89,104

Domestic work/workers, 9, 24, 26, 30, 33, 34, 35,39, 41, 44, 45, 47, 50, 51, 54, 55, 71-72, 76, 92,97, 101

Earnings, see also Wages formal employment:

private sector, 47public sector, 47, 54

informal employment:employers, 9, 43-44, 47, 48, 50, 54industrial outworkers, 9, 10, 54

informal wage workers:casual, 9, 47, 50, 53-54regular, 53-54own-account workers, 8-9, 47-48, 50

gap 9, 18, 38, 48, 52, 66, 68indicator for MDG 3, 39-41, 98, 104

Employment by type, indicator for MDG Goal 3, 13, 21, 40-41formal, 45-46indicators for MDG 3, 39-41, 98, 104informal, 38-39 rate, see Labour force participation rate relations of, 9, 10, 59, 61statistics on, 8-9, 40, 42, 44, 45, 46status, see Employment status

Employment-oriented development strategy, 12,73, 86-104

Employment statusdefinition, 38categories of:

casual wage workers, 9, 39, 44, 46-47,50, 53, 54

employees, 9, 10, 18, 21, 32, 39, 41, 42,44, 46, 48, 50-51, 55, 57, 61, 64, 67-71, 78-79, 83, 94

industrial outworkers/homeworkers, 9-10, 39, 44, 45, 54, 60, 61, 62, 63, 66, 68, 69-70, 73, 76, 81, 101

members of producer cooperatives,39, 41self-employed:

employers, 9, 10, 38, 41, 43-44, 47-48, 50-51, 54, 56, 61own-account workers, 9, 10, 38, 41, 44, 46-51, 56, 61, 80, 102unpaid contributing family workers, 9, 10, 38, 44-45, 51, 57, 61

Ethnic/racial identity and work, 21, 33, 34, 37, 65,71, 73, 81, 87, 91

Export processing zones (EPZs), 18, 62, 78,80,102

Female-headed households,18,37, 52-53, 54

Feminization of labour markets, 37-38, 55

Feminization of povertydefinition and measures, 20, 37-38, 56association with female-headed households, 37

Flexibility/flexibilization of labour markets, seeLabour markets

Formal economy, see Formal employment

Formal employment/jobprivate sector, 46, 47public sector, 47, 48, 50, 51statistics on, 46, 47

Formalization of the informal economy, 88-89

Garment workersagency workers, 70EPZ factory workers, 18, 70group-based industrial outworkers, 70industrial outworkers, 69-70

Genderdivision of labour, 10, 67and other sources of disadvantage, 33-35

Gender assessments, 91, 98,103

Gender-Responsive Budget Analysis/genderbudgets, 11, 91

Gender gapearnings, 9, 18, 35,40, 49-50, 68wages, 38, 66benefits, 35MDG indicators, 1, 16

Gender impact assessments, 91

Gender segmentation, see Labour markets

Hierarchy of earnings, 9, 53-54

Hierarchy of poverty risk, 9, 53-54

HIV/AIDS and work, 23, 27, 28, 31-32, 35

Homeworkers, see Industrial outworkers

Industrial outworkers, 9-10, 39, 44, 45, 54, 60, 61,62, 63, 66, 68, 69-70, 73, 76, 81, 101

Informal economy, see Informal employment

Informal Economy Budget Analysis, 11, 91-92, 98

Informal employment/work benefits of, 59, 62-63, 87causal model of, 66-67costs of, 63-66definition of, 38nature of, 59-62regulation of, 87associated risks and uncertainties, 63-66statistical framework for, 38, 54-55statistics on, 38-39

Informal sector, see also Informalemployment/economy1993 definition, 38

Informalization of labour force, see Labour force

Labour forcefeminization of, 37-38, 55-56flexibilization of, 63informalization of, 37-38, 42, 55, 59, 88participation rate, 16, 18, 25, 37-38, 41segmentation of 42-55statistics on, 54-56

Labour laws and policiesdomestic, 95and regional trade agreements, 96

Labour markets definition of, 55demand side factors, 55dualistic, 44flexibility of, 17, 42, 49, 59, 62-63, 67, 88gender segmentation of, 49interventions in, 73multi-segmented, 10, 55supply side factors, 55

Labour standardsinternational, 8, 12, 70, 90, 94and trade agreements, 96

Legal frameworks for informal workers, 12, 89, 94,101

Maquiladoras, see Export Processing Zones

Marketsaccess to, 11, 88, 89, 93, 94, 99, 103bargaining power in,12,19,62,63,64,76,79competitiveness in, 11,19, 62, 63, 65, 88, 95

Member-based organizations of informal workerscooperatives, 13, 39, 77, 78-79, 80issue-based, 78, 79trade unions, 78, 79-80

Microfinance, 12, 76, 88, 90, 92, 93, 94, 97

Migrant workers, 34, 69, 78, 83, 95, 96, 102

Millennium Declaration, 8, 15, 16, 19, 85

Millennium Development GoalsGoal 1, 20,41,103Goal 3, 10, 13, 20; indicators for, 16, 19, 21, 39-41, 56, 85, 98, 104Goal 8, 20; indicators for, 19, 27

Millennium Development Goals reports, 21, 103

Millennium Summit, 15

Occupational health and safety, 64, 65, 70, 90, 92,98

Organizing of informal workers:benefits of, 76-77strategies for, 78-80

Organizations of informal workers, see Member-based organizations of informal workers

Own account workers, see Employment status

Part-time work/workers, 29, 30, 35, 39, 42, 43

Place of workcategories of, 59-60associated costs, risks, and benefits, 9, 21, 59,60

Povertydimensions of, 10,13,15, 21,56, 68, 90,103income poverty, 21, 54, 56, 57, 67, 68measurement of, 51

Poverty reduction strategies, 13,19,56,90,104

Poverty Reduction Strategy Papers (PRSPs), 12,19-21, 76, 85, 89, 98, 103

Poverty riskdefinition of, 21of different employment statuses, 9, 10, 13, 15,38, 53-54, 89

Precarious employment, 8, 9, 18, 20, 23, 29, 33,34, 42, 43, 46, 47, 50, 54, 65, 68, 73

Religious identity and work, 21, 33, 35, 37, 73, 81

Representative voice, 11, 12,13, 76, 89, 90, 98,99, 102, 104

Reproductive work, 24

Rightsproperty, 10, 68, 87, 90, 97 workers’

right to work, 12, 90, 96, 101right to vend, 12, 96, 101right to organize, 82, 83, 88, 89, 90

Self-employment, see Employment status

Social protection for informal workerspublic works, 12, 97safety nets, 12, 90, 103insurance, 12, 90, 97, 102pensions, 12, 76, 90, 97

Street vendorspolicies for, 77, 92, 96, 99programmes for, 75, 77, 80, 99

Subsistence production, 23-24, 31

System of production global, 10, 17, 61-62industrial, 10, 62semi-industrial, 10traditional agriculture and artisan, 10, 62

Temporary work/workers, 9, 17, 18, 42-43, 84,95

Terms of trade for informal workers, 12, 89, 94,100,101

Trade unions, 12, 78, 79-80, 81, 82, 83, 84, 85,88, 95, 96, 97, 98, 99, 101

Underemployment, 20, 49, 55

Unemployment, 20, 27, 34, 44, 55, 64, 66, 71,87

Unpaid care workdefinition of, 24valuation of, 21, 23, 29

Unpaid contributing family members, seeEmployment Status

Value chainsglobal value chains, 62, 69

Wage gap, 38

Waste pickers, 60, 65, 72, 75, 79

Women’s worksegmentation of, 9, 21, 23, 29spatial dimensions of, 21, 23, 29temporal dimensions of, 21, 23, 29totality of, 21, 23 types of, 21, 23valuation of, 21, 23, 24, 29

Women’s identity as workersorganizing around, 77-80

Women’s organizations, 77-80

Worker-centred policy processes, 76, 77, 82, 83-85, 104

Working arrangements, 21, 37, 42, 59-63, 67, 68,81

Working conditions, 10, 13, 17, 30-31, 62, 63, 76,80, 81, 88, 90, 95

Working poor, 11-13, 15, 19, 21, 23, 35, 50-53,57, 59, 65, 67, 73, 76, 77, 85, 87, 89-91, 92,93, 94, 97, 98, 99, 100, 101, 102, 104

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Progress of the World’s Women 2005 marks the fifth anniversary of the UN MillenniumDeclaration and the tenth anniversary of the Beijing Platform for Action. It argues thatunless governments and policymakers pay more attention to employment, and its linksto poverty, the campaign to make poverty history will not succeed, and the hope forgender equality will founder on the reality of women’s growing economic insecurity.

Women, Work and Poverty makes the case for an increased focus on women’s infor-mal employment as a key pathway to reducing poverty and strengthening women’seconomic security. It provides the latest available data on the size and composition ofthe informal economy and compares national data on average earnings and povertyrisk across different segments of the informal and formal workforces in six developingcountries and one developed country to show the links between employment, genderand poverty. It looks at the costs and benefits of informal work and their consequencesfor women’s economic security. Finally, it provides a strategic framework — with goodpractice examples — for how to promote decent work for women informal workers,and shows why strong organizations of workers in the informal economy are vital toeffective policy reforms.

This report can and should be used as a call to action to help advocates, policy makers,governments and the international community “make poverty history.”

“Women, Work and Poverty is an innovative study that advances our understanding of the inter-relationship of employment, gender and poverty in low-income countries.The starting point is that the usual labour market categories of official data, based onformal employment relations, are wholly inadequate when a large proportion of workersin low-income countries work in informal employment relations. The measurement distortions, and hence perception and policy mistakes, are greatest with regard to thework of women, whose work is often unrecorded, and especially precarious and poorlyremunerated. This study offers new perspectives and new tools which will contributeto improved data collection, better public policy and hence more equitable and effective poverty reduction strategies in the years ahead.”

—Professor Jeffrey Sachs, Special Adviser to the UN Secretary-General on theMillennium Development Goals and Director of the Millennium Project

“Since 1972, when we started SEWA, we have worked hard to bring our members —working poor women in the informal economy — into the mainstream of the labourmovement, the women’s movement, and economic planning. We have struggled, inmany cases with support from UNIFEM, for their visibility in national statistics and theirvoice in local, national, and international policy-making bodies. Progress of the World’sWomen 2005: Women, Work and Poverty represents another important milestone in thisstruggle.”

—Ela Bhatt, Founder of SEWA (Self-Employed Women’s Association), India

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