Research On The Effect Of Informal Employment To Continuable Income Increase Of Social Vulnerable Groups

Ever since 1990s, especially since the government-supportive promotion of informal employment in Shanghai, China has experienced a sharp increase in informal employment almost in every field. As an effective employment promotion pattern, informal employment is especially fit for social vulnerable groups and becomes a significant source of income for them. After the 17th Party Congress in 2007, with the great emphasis on"Ensuring and Improving People's Livelihood", how to increase the income of social vulnerable groups will be one of the main subjects of China in the long run. As an employment promotion pattern fit for social vulnerable groups, informal employment faces with a long-term tendency of development and will exert continual effect on the increase of social vulnerable groups'income. Thus, the sound progress of informal employment is closely related to the continuable increase of social vulnerable groups'income.By qualitative and empirical analysis, it is discovered that the large group of social vulnerable people in Chinese cities generally confront with difficulties in employment an income, due to the combined restriction by low income and low human capital. Superfluous labor force and labor market segmentation under institutional defect, changing demand structure related to market factors and employment structural adjustment promoted by adjusting of industrial structure all determine the spontaneous development of informal employment. From the viewpoint of government intervention, it is also essential to optimize system which can promote effective integration between social vulnerable groups and informal employment.Theoretical analysis based on Pareto Improvement Principle, Efficiency Wage Theory, Crespi Effect and Cost Theory demonstrates that informal employment contributes to the increase of income level, income chance and income ability of social vulnerable groups and has the function and potency of helping social vulnerable groups in income increase. By empirical analysis based on computing and comparison of series of China's annual data, it is concluded that informal employment has higher contribution ratio and elasticity of employment, thus having more palpable effect of employment promotion. The correlation analysis between Informal Employment Index and Engel coefficient also proves that informal employment has the function of relieving poverty and increasing income of social vulnerable groups. Generally, informal employment becomes an impulse to enlarge the employment and increase the income of social vulnerable groups. Although the theoretical and empirical analysis has proved that informal employment has the function and potency of increasing social vulnerable groups'income, yet from the domestic practice, it is concluded that obstacles from two aspects obstruct the continuable increase of social vulnerable groups'income. On one hand, analysis based on unemployment risk model proves higher risk in informal employment, which becomes an obstruction for continuable income increase of social vulnerable groups. On the other hand, empirical analysis and canonical parse indicate that the lagging of system building challenges the sound progress of informal employment, which aggravates the risk of informal employment and also becomes obstacle for continuable increase of social vulnerable groups'income. The systematic deficiency in informal employment is especially obvious in social security system and human resource investment system. Social concept including institutional discrimination also restrains the continuable increase of social vulnerable groups'income.With the deepening of China's economic and social reform and the continuous employment pressure, informal employment is facing with continual impulse of development. From the aspect of income increase of social vulnerable groups, it is suggested that measures be taken to promote and enlarge informal employment so as to create more income source and income chance for social vulnerable groups. From the aspect of continuable income increase of social vulnerable groups, however, the sound progress of informal employment is the key factor. In order to keep informal employment on the track of sound progress, system building and optimization within informal employment are essential. Firstly, appropriate government regulation is suggested while keep the leading guidance of market mechanism. Secondly, reasonable and effective social security system should be built within informal employment. Thirdly, continuable human resource investment system in informal employment is also essential. Generally, it is concluded that informal employment in China should be keep in track of sound progress in order to promote continuable income increase of social vulnerable groups.