Happy In The Informal Economy? A Case Study Of Well-Being Among Day Labourers In South Africa

Abstract

Past research provided evidence of thenegative effect that individual unemployment can have on subjective well-being.The persistent high levels of unemployment and poverty in South Africa havebeen well documented. Many people are forced into the informal economy, wherethey engage in a variety of survivalist activities such as day labouring. As noprevious study has been conducted on the well-being of day labourers, the aimof this paper is to investigate the determinants of the well-being of South Africanday labourers. Objective and subjective functions are compared to determine therole of income and other variables in the well-being of day labourers. Thedeterminants are categorised according to economic, comparison and attitudinalvariables. The objective function uses income and the subjective function usesthe binary measure of ‘experiencing a good week in terms of wages’ as dependentvariables. The results showed that comparison variables are importantdeterminants for the subjective measure of well-being, and attitudinalvariables are important for the objective measure of well-being. The economicvariables were important in both functions. The findings of this paper confirmother research findings showing that personal income is important for well-beingin a poor community. The difference between these functions indicates that thesubjective and objective measures of well-being both capture valuablecharacteristics of subjective well-being (SWB) in a poor community.