Informal Work and Livelihoods in Mexico: Getting By or Getting Ahead?∗

Abstract

The widespread adoption of neoliberal reforms during the past quarter century has had profound implications for the livelihoods of those who live and work in cities throughout Latin America. This case study of Mérida, Mexico, builds directly on recent research about the changing nature of work and the role of informality as a livelihood strategy in Latin America and attempts to explain how place-specific patterns of informal work emerge from neoliberal reforms and concomitant urban economic restructuring. Drawing on field research and a large household survey, this article reveals that general patterns of informality coincide with previous findings from Latin America: high levels of informal work; increased heterogeneity of informality; and significant mobility, with a large share of workers “opting out” of the formal sector voluntarily. However, compared with previous research in Mexico, this study shows that informal work is significantly more pervasive, particularly among women; less likely to be voluntary; and pays considerably less. In light of gender considerations and significant discrepancies between local patterns of informality and national trends, this case study casts doubt on recent World Bank encyclicals affirming the resemblance between self-employment in Mexico and microentrepreneurship in more developed countries. Moreover, the article concludes that World Bank literature conveniently overlooks the gendered nature of informal work in Latin America and the profound divergence between the express purposes of neoliberalism and its actual implications. As a result, World Bank research on informality serves to justify the neoliberal model, rather than improve the livelihoods of those who live and work in cities throughout Latin America.