V-goods and the Role of the Urban Informal Sector in Development

Abstract

Abstract The informal sector typically accounts for a high proportion of the work force in developing countries. It is often described as a low-productivity backwater ‘sponge’ which absorbs those who can’t find productive employment in the rural areas or in formal urban activities. In contrast, others suggest that the sector can make an important and indeed increasing contribution to production and income generation. The purpose of this paper is to advance this debate by taking a closer look at the sector itself and analysing its relationships with the rest of the economy.

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