Informality, Job Quality, and Welfare in Sri Lanka
Informal employment remains a salient and persistent feature of the Sri Lanka labor market, with around 70 percent of the work force informally employed. There are generally three reasons to be concerned about high informality: poverty, productivit...
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| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/341681597688560604/Informality-Job-Quality-and-Welfare-in-Sri-Lanka http://hdl.handle.net/10986/34399 |
| Summary: | Informal employment remains a salient
and persistent feature of the Sri Lanka labor market, with
around 70 percent of the work force informally employed.
There are generally three reasons to be concerned about high
informality: poverty, productivity and public finance. This
report focuses on the poverty and vulnerability aspect of
informal employment, by showing that informal jobs are more
precarious in nature than formal jobs and are associated
with inferior working conditions and lower earnings. The
three key messages of the report are as follows. First, The
quality of informal jobs is much lower than that of formal
jobs. Informal workers have more precarious employment
arrangements and inferior working conditions. Their low
earnings levels elevate the risk of poverty. Second,
Stringent labor laws, along with the high cost of compliance
and complexity of labor regulations, have encouraged
informality. But formalization does not necessarily ease
other constraints such as access to credit, reducing the
incentive to formalize. Third, Reducing informality should
not be in itself a policy goal. Reforms should focus on
regulatory reforms that aim to reduce the cost and increase
the benefits of formality, as well as on measures that
enhance productivity. |
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