The hidden costs of informal work: lack of social protection and subjective well-being in Colombia

Objectives To examine the association between informal work and subjective well-being in Colombia. Methods Repeated cross-sectional study based on data from three nationally representative surveys of 1997, 2005 and 2011 (n = 4485). Life satisfaction was measured with a Likert scale ranging from 1 to 10 points. Informal work was defined as paid work without pension/unemployment contributions. Individual-level pooled Generalized Estimating Equation (GEE) models were used to assess the association between informal work and life satisfaction. Propensity Score Matching (PSM) was applied to address potential selection into informal work. Results Informal work increased from 52 % in 1997 to 68 % in 2011. Informal workers averaged significantly lower life satisfaction than formal (GEE: b = -0.14, 95 % CI -0.26, -0.01, p < 0.05). These results were confirmed in PSM models that controlled for selection by measured confounders (PSM: b = -0.15, 95 % CI -0.23, -0.03, p < 0.05). Conclusions Informal workers who are not covered by social security systems had lower subjective well-being than workers in the formal economy. Results suggest that recent increases in informal work may also translate into reduced subjective well-being.