Factors Determining Growth And Productivity Of The Informal Sector The Case Of Addis Ababa.

The purpose of this study is to explore the determinants of income as well as policyrnwhich potentially affect the performance of the informal sector in Addis Ababa. The casernstudy approach is fo llowed and attempt is made to make policy recommendations basedrnon the study results. The primary data was collected from 150 operators of the associationrnusing structured questionnaire. In addition, brief survey of the literature was conductedrnregarding institutional, legislative and other capacity bui lding efforts made for therndevelopment of the informal sector. To carry out estimations, a standard earning equationrnwas employed.rnThe result indicates that labor market expenence, marital status and family SIzesrnsigni fic antly influence earnings of metal recyc lers and traders of recyclable metal, plasticrnand glass items. For recyclable items traders the principal determinants of income arerneducation and own-capital. Informal metal recyclers, on the other hand, tend to investrnhigher capital and responded better to the contemporary micro and small scale policy.rnThe study also shows that in general most informal sector operators lack tuned andrnessential supports like access to finance, working premise and market linkage forrnbusiness development. It is also noted that government lacked the commitment andrninstitutional capacity to provide continuous support and guidance to the sector.

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