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The Urban Informal Sector: Theory, Characteristics, and Growth From 1980 to 1990 with a Special Emphasis on Indonesia

By Robert C. Rice

Abstract

This paper defines the informal sector (IS) as being self-employed persons assisted by family and other non-wage earners. It reports on a survey in Semarang which shows that many IS self-employees earn more than the regional minimum wage which is consistent with the findings from other studies. An analysis of Central Bureau of Statistics data show that the rate of growth of the informal sector from 1985 to 1990 was much lower than the formal sector and much lower than the informal sector from 1980 to 1985, with the construction and transportation sectors being exceptions and the female informal sector growth being 39 % that of males. Various theoretical aspects of the informal sector are discussed which need to be taken into account in policy formulation

Year: 1996
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