Explaining the Normality of Informal Employment in Ukraine: A Product of Exit or Exclusion?

American Journal of Economics and Sociology, Vol. 70, No. 3, pp. 729-755, 2011

27 Pages Posted: 14 Dec 2015

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

John Round

University of Birmingham

Peter Rodgers

University of Sheffield

Date Written: 2011

Abstract

This paper evaluates critically the competing explanations for the persistence and growth of informal employment in contemporary societies. These interpret the normality of informality either through a structuralist lens as arising out of “exclusion” from state benefits and the circuits of the modern economy or through a neo-liberal and/or post-structuralist lens as driven by the voluntary “exit” of workers out of formal institutions and into this alternative realm. To evaluate critically the validity of these competing explanations, this paper reports a 2005/6 survey of informal employment in post-socialist Ukraine. Analyzing the results of 600 face-to-face interviews, the finding is that either/or explanations need to be transcended. Informal employment is neither universally driven by exclusion nor exit. Instead, some participate mostly due to exclusion, others mostly for exit rationales and some for a combination of the two, with different mixtures across different populations and types of informal employment. The outcome is a call to move towards more context-bound understandings of the pervasiveness of informality through greater appreciation of the heterogeneity of this sphere and how both exit and exclusion are variously entwined in different settings.

Keywords: underground economy, undeclared work, shadow economy, tax compliance, Ukraine, post-socialism

JEL Classification: H26, J46, J48, K34, K42, O17

Suggested Citation

Williams, Colin and Round, John and Rodgers, Peter, Explaining the Normality of Informal Employment in Ukraine: A Product of Exit or Exclusion? (2011). American Journal of Economics and Sociology, Vol. 70, No. 3, pp. 729-755, 2011, Available at SSRN: https://ssrn.com/abstract=2702996

Colin Williams (Contact Author)

University of Sheffield - School of Management ( email )

15 Conduit Road
Sheffield, S10 1FL
United Kingdom

HOME PAGE: http://https://www.sheffield.ac.uk/management/staff/williams/index

John Round

University of Birmingham ( email )

Edgbaston, Birmingham B15 2TT
United Kingdom

Peter Rodgers

University of Sheffield ( email )

17 Mappin Street
Sheffield, Sheffield S1 4DT
United Kingdom

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