The Informal Sector as a Catalyst for Employment Generation in Lagos State, Nigeria

Abstract

Unemployment remains high in Nigeria due to disintegration between the formal and informal sectors, among other factors. While the unemployed largely focus on the formal sector in search of jobs, there is inadequate interest in the informal sector. Yet, this sector provides livelihoods for the majority of the population. This paper examines the informal sector as a catalyst for generating employment in Lagos State, Nigeria, using the Social Capital Theory and a descriptive survey research design. Data were collected from 480 apprentices, 40 masters, 20 journeymen, and 120 members of various communities through a structured questionnaire, Key Informant Interviews and Focus Group Discussions, respectively. The findings showed that 64.8 percent of the respondents reported parental sponsorship of vocations in the informal sector, 14.2 percent of the respondents were self-sponsored, and the remainders (18.5 percent and 2.5 percent) were reportedly sponsored by their relatives and masters. Awareness of opportunities for self employment in the informal sector was demonstrated by 71 percent of the respondents. However, 66.3 percent of the respondents thought that schooling could be better than vocations in the informal sector. Mothers' occupation significantly associated with individuals' choice of vocation in the informal sector (χ2 = 33.71; P < 0.05). There was no significant difference in the proposed plans for self employment among the respondents in furniture and tailoring workshops (χ2 = 1.44; P > 0.05). Planning for self employment was significantly influenced by several factors including gender, age, mothers' occupation, career plan, and satisfaction within the informal sector (t = 19.247, P < 0.01). The informal sector is vital for survival of youth in Lagos State, Nigeria. This sector should be supported for poverty eradication and entrepreneurial development.

The driving effect of informal economies on urbanization in China

“…Attention has been paid to effects of the informal economy on economic growth, employment growth, and poverty reduction (Huang et al, 2011;Shen and Li, 2011;Akinwale, 2012). However, little is known of the relationship between the informal economy and urbanization.…”

Integrating Theories on Informal Economies: An Examination of Causes of Urban Informal Economies in China

“…Together with climate change, resource depletion, rapid urbanization, and poverty, employment informality is listed by the United Nations Human Settlement Programme (UN-Habitat) as one of the major challenges to global sustainable development in the 21st century [3]. On one hand, the informal economy contributes to sustainable development because of its role in alleviating unemployment and poverty and promoting local economies [4][5][6][7]; on the other hand, it is also seen as a sign of underdevelopment and unsustainability given the nature of poor working conditions and precarity in informal employment [8][9][10]. Hence, the development and regulation of informal economies has become a key policy issue for national governments and supra-national agencies worldwide.…”