Preliminary exploration in a quantitative assessment of informal labour markets

Dr. Tamaro Green, DS

This research proposes measures for identifying the growth of informal labour markets by identifying trends and observations that may lead to a more accurate comprehension of the size in comparison to formal labour markets. To reduce the opportunity for error, the structure of this research is to identify a procedure that will reduce bias if samples of the population of the labor force are evaluated. Akobeng (2016) explains that there are a number of factors that affect sample size. The factors that could determine an adequate sample size include the error rates, the smallest possible sample size for the research, the variability for continuous outcomes, and the frequency for dichotomous outcomes (Akobeng, 2016). To measure the true population of the labor force, this initial evaluation provides some of the datapoints for which further evaluation may provide greater details. Descriptive statistics summarizes data while inferential statistics makes assumptions based on the data (Saito & Saito, 2016; Tenan, 2016). This initial exploration of the data available makes inferences based on the entire population data available from the Office of Management and Budget income and expenditures (Office of Management and Budget).

The Office of Management and Budget provides historical data for income and expenditures for every year from the earlier part of the 20th century until 2019 and predictions until 2019 (Office of Management and Budget). This data may provide insight in ways of measuring the informal labour market. Evaluating health care, personal income tax, corporate income tax, and other indicators may provide insight into the true share of the informal labour market. In 2019, the percentage of the GDP for health care purposes was 6.4%. It is estimated to range from 5.9% to 6.6% for the years 2020 to 2025. The total government expenditures has generally increased on the federal level from 17% in 1948 to 32% in 2019. The state expenditures has increased from 5.9% in 1948 to 11.3% in 2019. The percentage of government expenditures for social security and Medicare has increased from 1% in 1948 to 26% in 2019. The percentage has remained steady at 26% since 2014.

In 1934, the ration of individual income tax to corporate income tax represented 115%. From 1935 to 1940 it stayed around 100% or close to equal. In 1940 the ration fell to 75% and dropped to a low of 68% in 1943. In 1994, the ratio went up to 133%. In 1947 it went up to 208%. The ratio declined in 1949 to 139% and ranged from 132% to 240% until 1970. In 1971, the ratio was 322%, where the personal income tax was three times the corporate income tax, and did not drop below 286 to 1980. From 1980 to 1990, the revenue from individual income tax was 4 to 7 as much as corporate tax each year. From 1990 to 2000, it was 3 to 4 times as much as corporate tax revenue every year. From 2000 to 2015, the ration of personal tax revenue was in a range from 295% to 662% that of corporate tax revenue. For the years 2016, 2017, 2018, 2019, the ratio of personal to corporate tax revenue was 516%, 534%, 822%, and 746% respectively:

To measure the informal labour market, historical data may prove value where more accurate information can be assessed and compared to trends in recent years. Historical data of years where the difference between informal and formal labours can be assessed through resources such as healthcare, retirement payments, and social security, may be compared to recent years where that information is not so readily available. This is a theoretical approach and further exploration is necessary to test the feasibility of this study.

In making the discoveries of the informal labor market, it is critical for the research to remain ethical. Research in ethics continues to make new strides in improving research methods. Christensen, Cote, and Latham (2016) explore the advancement of ethical research. There can be an ethical conflict between the researcher and the organization. There can be compensation involved or fear of retaliation. Hadjistavropoulos, Malloy, Douaud, and Smythe (2016) explain an ethical conflict that a professional can have as a member of a profession and a member of an organization. Andreae et al. (2016) explain ethical, social, and regulatory barriers that may exist in therapeutic research. Grobler and Horne (2017) propose an ethical risk assessment. Ogunrin, Ogunrin, and Murray (2016) stress the importance of correct practice of the ethical review process in research. Objective research into the growth of informal labour markets may provide an opportunity to improve scientific awareness in this area.

References:

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Andreae, M. H., Rhodes, E., Bourgoise, T., Carter, G. M., White, R. S., Indyk, D., . . . Rhodes, R. (2016). An ethical exploration of barriers to research on controlled drugs. The American Journal of Bioethics, 16(4), 36–47.

Christensen, A. L., Cote, J., & Latham, C. K. (2016). Insights regarding the applicability of the defining issues test to advance ethics research with accounting students: A meta-analytic review. Journal of Business Ethics, 133(1), 141–163.

Grobler, A., & Horne, A. L. (2017). Conceptualisation of an ethical risk assessment for higher education institutions. South African Journal of Higher Education, 31(2), 154–171. doi:10.208535/31–2–1032

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Saito, Y., & Saito, K. (2016). Differential effects of instruction on the development of second language comprehensibility, word stress, rhythm, and intonation: The case of inexperienced Japanese EFL learners. Language Teaching Research, 1362168816643111.

Tenan, M. S. (2016). A Statistical Method and Tool to Account for Indirect Calorimetry Differential Measurement Error in a Single-Subject Analysis. Frontiers in physiology, 7.