A study of obligatory and contingent expenditure patterns and resultant indebtedness in the urban informal sector

SN Business & Economics - Tập 3 Số 3 - Trang 1-21 - 2023
Khan, Ghazala Ali1,2
1Pandit Deendayal Upadhyaya National Academy of Social Security (PDNASS), Janakpuri, India
2Employees Provident Fund Organization (EPFO), New Delhi, India

Tóm tắt

Socially mandated expenditures on occasions like weddings and death rituals are unique to the Indian socio-cultural milieu, and are often excessive, being disproportionate to poor families’ income and earnings potential. Combined with economic shocks like illnesses, loss of jobs, or death of the principal bread earner, these expenses serve as major setbacks to economic stability, often leading to borrowings and incidences of high indebtedness. This study examined the social expenditure patterns and outlays, vis-a-vis earnings and savings, among poor informal sector workers in urban settings, and tried to find out the extent to which obligatory and contingent expenditure was responsible for indebtedness, and whether the cost of debt was mediated by informality of occupation. The study found that disproportionate spending beyond earning capacity was the cause of indebtedness and compounding penury among the respondents. Comparing the prevalence and cost of debt with formal sector workers in similar income brackets, it concluded that though the extent of indebtedness did not vary by the formality of occupation, high-cost debt was the norm in the informal sector but not in the formal sector.

Tài liệu tham khảo

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