Skill Formation, Employment and Earnings in the Urban Informal Sector

In: The Pakistan development review: PDR, Band 26, Heft 4, S. 711-719

Abstract

The origins of the informal sector are traced to the twin
problems of rapid urbanization, as a result of rural to urban migration,
and low rates of employment expansion in the "modem" sector. The
inability of the "modern" sector to provide jobs for the fast growing
urban labour force, however, is not' reflected in widespread
unemployment. Instead, the surplus labour is absorbed in other sections
of the urban economy which has been termed in the development literature
as the informal sector. The informal sector not only serves the
important function of absorbing surplus labour unable to find jobs in
the modern organized sector but it is also the training ground for
workers in the economy. According to the Sixth Plan document, of the
estimated 50,000 skilled workers produced annually only ten percent go
through formal training institutions (Government of Pakistan 1983).