Informal Employment (Edexcel IGCSE Geography)

Causes of Informal Employment

Spec point — 4GE1-S6.067

• Informal employment is any employment which is unregulated and unofficial

• It is estimated that more than 60% of the world's employed population work in informal employment

• As much as 93% of informal employment is in developing and emerging countries

  • Levels of underemployment and unemployment are high in these areas

• Most informal employment is work in the tertiary sector

• Examples of jobs in the informal economy include:

  • shoe shining
  • rubbish collecting
  • selling fruit or other products on the street
  • para-transit - including rickshaws and tuk-tuks

• There are several causes of informal employment

Causes of Informal Employment

Impacts of Informal Employment

Spec point — 4GE1-S6.067

• People working in the informal economy:

  • Have no healthcare benefits
  • Are often exposed to health or safety risks
  • Have no contracts or guaranteed pay
  • Have no holiday or sick pay

• Paratransit often causes congestion and if motorised they cause additional pollution

• Lack of regulations means workers are often exploited by employers

• Many children working in informal employment do not get the opportunity to go to school

• Children may be exposed to health risks, drugs, violence and crime

• Governments collect less in tax because the jobs are not official

Case Study: Informal Employment in Dhaka

Spec point — 4GE1-S6.067

Case Study

• Dhaka is the capital of Bangladesh

• It is a megacity with a population of 22.5 million people

• Approximately 400,000 people migrate to Dhaka each year

• Estimates suggest that over 75% of the population is engaged in informal employment:

  • 500,000 rickshaw drivers
  • 80,000 waste-related workers
  • Workers in small workshops
  • Casual workers in restaurants and hotels
  • Day labourers in construction

• Informal employment also includes children with over 690,000 children in Dhaka involved in informal employment

• Many of Dhaka's informal workers live in informal settlements

Characteristics of Dhaka's Informal Sector

• Low pay
• Long working hours
• Temporary or part-time work
• Underemployment
• No benefits such as holiday pay or sick pay
• Poor and unhealthy working conditions
• Health and safety risks
• No training
• Exploitation by employers
• No legal protection

Worked Example Study Figure 1, which shows examples of informal employment in India

Figure 1 – Examples of Informal Employment in India

Explain one piece of evidence that there is informal employment in this city

(2 Marks)

• Answer
• There is a man selling goods from a cart **(1) **because he doesn't have a shop to sell his goods from (1)

** OR**

• There is a motorised rickshaw, or tuk-tuk (1); these are not part of the public transport system (1)

Exam Hint Remember underemployment and unemployment are not the same. Underemployment is when a person has work but is not working as many hours as they want to. Unemployment is when a person is not working.