Informal Self‐Employment in Developing Countries: Entrepreneurship or Survivalist Strategy? Some Implications for Public Policy

A central debate around labor market informality, which has enormous implications for the design and implementation of public policy, relates to the nature of informal employment. Is informal employment and, in particular, informal self‐employment, a symptom and, at the same time, a reproductive factor of precariousness and inequality, as well as social and individual poverty? Or is it, on the contrary, a space of individual and social action that reflects economic initiative and business potential which, if channeled and fostered properly, could contribute to social and economic development and, consequently, to the reduction of inequality and poverty? In this article, the findings of the 2005 edition of the Mexican version of the World Value Survey—concerning relevant values and attitudes of informal participants in the labor force in Mexico—are used to assess whether informal self‐employment is a reflection of incipient entrepreneurship and individual choice or, rather, a survival strategy forced on individuals by their precarious circumstances. This article explores the public policy implications of the results obtained.