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Working informally

Exclusion or choice?

Working without basic social or legal protections is the norm in developing countries. Mirco Tonin discusses the reasons for this and the possible policy response

CHARLES STURGE/ALAMY

When you think about a job, you probably have in mind working as an employee for a company (or the government or another type of organisation), showing up every morning (or evening) at your workplace, getting a wage plus other benefits such as paid holiday time and so on. The relationship between you and your employer is regulated by an employment contract, specifying your hours of work etc., and by the law.

Alternatively, and this is the case for one in every seven workers in the UK, you may be self-employed—setting up your own trade or business and being your own boss. In this case too, your working activity is regulated by the law, mandating, for example, the type of records you should keep, the taxes you must pay, and the legal responsibilities that you have in relation to your customers. At the same time, your activity benefits from this regulation—for example, from the possibility of enforcing contracts in courts — and you might be eligible for government grants and subsidies to further develop your business.

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Questions on economic concepts

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Why should Greece stay in the eurozone?

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