In the context of dualism of the labor market—informal sector labor market and formal sector labor market—this study assessed the impact of job quality
on worker’s well-being. Using the first stage of the 2012 national survey data
1-2-3, preliminary results revealed that among 1443 employees, 85.44% were
working in the informal sector whereas 14.56% in the formal sector. Given its
multidimensional characteristics, the job quality was measured by six
components such as job security, existence of union, training, employer’s support,
working hours and promotion. In terms of contribution of each dimension, the
Multiple Component Analysis was applied and based on the finding, we have
selected the first three components with 46%, 39% and 15% respectively as a
contribution to the construction of the job quality index. On the other hand,
the well-being was measured by worker’s income and two classes— poor employee and non-poor employees—were created using the 2012 monetary
threshold according to the place of residence. We estimated afterwards the
logit model. Our results have revealed that the effect of job quality was
significantly positive on worker’s well-being in both cases workers from
Informal Sector and all workers irrespectively of their sector. In formal
sector, the evidence of the significant impact of job quality was statistically
rejected. The main explanation of this finding can be imputed to the job
quality level which was already high in formal sector compared to informal
sector. Furthermore, for all workers, this result was a consequence of the
dominant effect of job quality on worker’s well-being in informal sector on
that in formal sector. In view of above findings, there is a need of
controlling and strengthening the job quality in informal sector for an
increase in job security index by one unit, the probability that worker’s
well-being increases is 0.38.
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