Is the Employment Situation Improving?

Economic development and growth are supposed to improve the emp­loyment situation in a country. Much of development literature maintains this idea as a major expectation at least from the long-run perspective. It is also the case that the greater the amount of surplus labour in an economy and the greater the extent of underemployment, the slower will be the pace of change in the employment structure towards more regular and protected waged forms of employment.¹ In fact, one can only give a proper perspective to the misunderstood policy challenges of formalisation in a developing economy by first examining these matters at the broadest level with existing data. The formalisation process referred to here is that of contractual arrangements of workers.² In order to capture this phenomenon emp­irically we need to adapt typical labour force survey type of data on employment to generate employment categories that allow us to detect the tra­nsition that is supposed to accompany the development process. This change should then reflect in the changing distribution of employment types so constructed, as economic growth takes place over time.

All characterisations formal/informal, regular/non-regular, organised/unorgani­sed used for employment or parts of the economy or both are broad conceptual constructs that are bound only in theory. These categories have social and economic meanings as well as developm­ental contexts.