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Marginalisation Vs. Dynamism : A Study of the Informal Sector in Dhaka City

A.T.M. Nurul Amin

 

Abstract

The paper examines the labour force of the informal sector in Dhaka with respect to earnings, ability to save and invest, and attitudes and motivations. The findings indicate that involvement in informal activities is perceived as a means of altering the personal fortunes of people from a poor economic background. This is illustrated by the overwhelming preference of those self-employed in the sector to continue in current or similar activity within the sector. That such responses are based on genuine economic considerations is supported by the data on income which compare favourably with income of comparable groups in both urban and rural areas. It is not merely the current level of income that offers hope to the participants; prospects for the future also are perceived as good. This does not seem to be delusionary since there is evidence of occupational mobility within the sector. Overall, our results confirm that informal activities may be classified into two distinct groups; (1) those which lead to some accumulation of capital and (2) those leading only to a marginal living. The latter group comprises of about one-quarter of the self-employed and more than one-third of the employees. In contrast, upwards of one-third of the self-employed show significant economic potential. In general, the informal sector opens up some ways for self-improvement and breaking out of poverty to the disadvantaged of the urban labour force.

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