Reproduced Inequality: Participation and Success in the South African Informal Economy

Early studies of the informal economy have alternately argued either that employment in this secondary economy reinforces social inequality or that it dilutes it. More recent studies argue that the informal economy is varied in its types of jobs, simultaneously offering opportunities to many who would not have them in the formal economy, yet further exploiting others. National level survey data from South Africa and the methods of stratification research are used in this study to examine employment in the informal economy and to compare levels of success attained in the informal and formal economies. Success in both economies tends to favor whites, men, and those with more education and experience; nonwhites, women, and the less educated are more likely to work in the informal economy. The key findingof this analysis is that success in terms of occupational status and income attainment follows patterns of stratificationi ti in the informal economy consistent with those in the formal economy. Over the last twenty years, a growing body of research has questioned the idea that societies contain only one form of work, or one economy. Researchers have shown that work appears in many forms, with second economies, informal economies, ethnic enclaves, house work, self-provisioning and state employment all getting *An earlier version of this article was presented at the 1995 Burlington, Vermont meeting of the ISA Research Committee on Social Stratification and Mobility. I thank Donald Treiman for