This thesis develops new insights into the cause and nature of informal employment in Chile.
Chile represents a highly interesting case to study that has repeatedly attracted the attention of
the international scientific community. In some aspects, the country is rapidly approaching the
threshold between “developing” and “developed” status. Indicators for economic growth and
poverty reduction show impressive progress throughout the past decades. Unemployment has
also decreased considerably. Besides Mexico, Chile is the only Latin American country that
has joined the ranks of the “exclusive club” of the OECD countries. However, a broad variety
of issues in social development remain unsolved, which crystallizes for example in high
income inequality or extremely low public spending on education. The recent student
movement that resulted in vehement protests and was supported from many sides is indicative
that Chileans are conscious of continuous deficits.
From the outset, research on informality is confronted with the significant problem of the
heterogeneity of the phenomenon, as conceptualizations, terms and definitions employed
differ considerably. In its beginnings, research was focused on the “informal sector”, a
conceptualization that takes into account predominantly microenterprises with low
productivity levels and low technological innovation. However, recent years have seen an
increased attention for “informal employment”, following the recognition that informality is
not necessarily limited to informal sector enterprises. Components such as social security or
contractual status have gained importance as aspects of informal employment (Jütting et al.
2008).
Informality was identified as an inherent characteristic of developing labor markets, but has
also been recognized as a feature in any society where institutions play a role in the
organization of interactions between actors (Portes et al. 1989). From a macroeconomic
perspective, many studies have focused on factors that determine the size of the informal
sector. On the other hand, decisions of workers to work formally or informally have been of
interest for researchers (Loayza 2006; Perry et al. 2007). However, analyses often remain
focused on general indicators and developments of these indicators in times of economic
crises.