The Negative Influence of Labor Informality on Subjective Well-Being


  • Benjamin Temkin Facultad Latinoamericana de Ciencias Sociales (FLACSO)



This paper explores the relationship between informal employment and the subjective well-being of informal employees and self-employed workers in Mexico. The main hypothesis is that labor informality has a significantly negative impact on the level of self-reported life satisfaction and happiness of individuals. This effect is sustained even when controlling for potentially determinant socio-demographic factors, in particular income. The module of self-reported well-being (BIARE) that was part of the National Household Spending Survey (ENGASTO), conducted by the National Institute of Statistics and Geography (INEGI) during the first quarter of 2012 was used for this research. The module gathered, for the first time in Mexico, official statistics on life satisfaction and happiness. The results of the investigation show that informal employment is by itself a factor comparable to income in its influence on the perceived well-being of individuals.

Author Biography

Benjamin Temkin, Facultad Latinoamericana de Ciencias Sociales (FLACSO)

Benjamin (Benny) Temkin is a Professor at the Facultad Latinoamericana de Ciencias Sociales (Flacso – Mexico). He has taught at Columbia University, Tel-Aviv University, and the Hebrew University in Jerusalem. He has written extensively on informal employment and the informal sector.