Background and objectives Introduction
4 Can productivity in SMEs be increased by investing in workers’ health?
enterprises, households. This recently published ILO manual aims to create common standards for the collection of data on informality. These standards have yet to be met by
national statistical bodies or authors of relevant works. It is also often not possible to re- categorize the data of published studies ex post, in order to make them compatible with the
ILO definition.
The definitions employed in the studies used for this literature review range from informality being determined solely on the basis of tax evasion Gatti and Honorati, 2008
to approximating the informal economy as an unregulated, voluntary, developing-country counterpart to the small scale, entrepreneurial sector in developed countries Maloney,
2004. In some studies the informal economy is referenced without an explicit definition as to what it entails Acharya et al., 2013.
In a field as narrow as SME employment in enterprises with between 50 and 250 employees, where data is scarce already, adherence to the detailed ILO statistical
framework on the informal economy is not achievable. Relevant publications use terms such as informality, informal employment, informal economy employment, sometimes
interchangeably, according to arbitrary definitions or the respective national definitions.
As some of the concepts mentioned above − such as households − are unlikely to play a role in SMEs with between 50 and 250 employees, in this paper informality and informal
employment will be defined as follows:
Informal employment is unregistered with the government, usually out of efforts to evadeavoid paperwork, time-consuming procedures, taxes and contributions. This may have a
variety of causes, from a desire for employment of family members as backstopping and cheap labour to a simple profit motive on the part of the owner, hoping to save on taxes. Thus,
workers in informal employment are often not part of statutory social security schemes.
In contrast, formal employment will refer to proper registration of workers and payment of the required contributions and taxes. Data on informality will be in line with
this definition unless indicated otherwise. These definitions have limitations; groups such as the self-employed are not included in either, but this is of no concern here as this paper
concerns itself primarily with SMEs.
Given these challenges and the general scarcity of scholarly work on social protection and working conditions in SMEs, this paper draws on more general work on working
conditions and to some extent generalizes findings in order to draw conclusions on the current state of social protection in SMEs and to indicate needs for further research and
data gathering.
Can productivity in SMEs be increased by investing in workers’ health? 5