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The dynamics of informality : employment relations in small firms and the effects of regulatory change

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Ram, Monder, Edwards, P. K., Gilman, Mark William and Arrowsmith, James. (2001) The dynamics of informality : employment relations in small firms and the effects of regulatory change. Work, Employment & Society, Vol.15 (No.4). pp. 845-861. ISSN 0950-0170

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Official URL: http://dx.doi.org/10.1017/S0950017001008455

Abstract

This paper addresses two related issues: the effect of the `regulatory shock' of the National Minimum Wage on small firms and the consequent effects on the commonly observed practice of `informality'. It draws on a survey of such firms but primarily uses case study evidence from five firms to examine the processes at work. Detailed case studies of such firms remain rare, and they tend to analyse a largely unchanging world. We show how patterns of informality change over time. The regulatory shock had varying effects, as some firms moved up-market and others were pressed to the edges of the legitimate market and in some cases out of business altogether. In the firms moving up-market, informality was redefined into a more disciplined and formalised approach, while those going down-market relied even more heavily on family and other ties to survive. The NMW led to some improved wages, though there was also evasion, and it has sharpened the divide between the legitimate and illicit areas of business.

Item Type:

Journal Article

Subjects:

H Social Sciences > HD Industries. Land use. Labor

Divisions:

Faculty of Social Sciences > Warwick Business School

Library of Congress Subject Headings (LCSH):

Minimum wage -- Great Britain, Minimum wage -- Law and legislation -- Great Britain, Small business -- Finance, Informal sector (Economics) -- Great Britain

Journal or Publication Title:

Work, Employment & Society

Publisher:

Sage Publications Ltd.

ISSN:

0950-0170

Official Date:

December 2001

Dates:

Date	Event
December 2001	Published

Volume:

Vol.15

Number:

No.4

Page Range:

pp. 845-861

Identification Number:

10.1017/S0950017001008455

Status:

Peer Reviewed

Publication Status:

Published

Access rights to Published version:

Open Access

Funder:

Economic and Social Research Council (Great Britain) (ESRC)

Grant number:

L212252031 (ESRC)

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