George Melios
Classical labour market models have proved limited in capturing the extreme shocks precipitating macroeconomic instability and issues of under-employment, further intensified by mass displacement and demographic change. Our interdisciplinary empirical framework will produce deeper analyses of connections between macroeconomic instability, uncertainty, structural change and their consequences on real-world choices affecting livelihoods and wellbeing. Alongside empirical evidence, we will develop decision-support tools for vulnerable groups enabling efficient job search and matching, thus increasing employment chances. Empowering people to make better decisions about their livelihoods will have broader societal benefits as insecure, poorly paid jobs generate broad social and public health impacts.
Recent statistics from the International Labour Organisation (ILO) suggest that informal economy accounts for more than half of the global labour force and more than 90% of micro and small enterprises (MSEs). Informality is an important characteristic of labour markets in the world with millions of economic units operating and hundreds of millions of workers pursuing their livelihoods in conditions of informality.[1] In this context, classical labour market models have proved limited in capturing the extreme shocks precipitating macroeconomic instability and issues of under-employment, further intensified by mass displacement and demographic change.
This project is a study of decision-making processes related to livelihood strategies and prosperity in the context of mass displacement and informal labour markets in Lebanon. Informal labour markets are growing around the world, even in contexts where GDP growth is strong (ILO, 2014). Yet, there is a dearth of up to date data on such markets, how they function within broader livelihood strategies, and how their dynamics operate at individual, household, community and regional scales. This study focuses on an innovative interdisciplinary methodological and theoretical framework to improve our understanding of informal labour markets and their connections to livelihoods and sustainable prosperity under conditions of uncertainty and resource constraint.
The proposed research aims to develop a series of methods, models and concepts for understanding livelihood decision-making from the perspective of various actors/agents in Lebanon, across a range of factors such as age, gender, educational qualifications and legal status. Employing an innovative and multi-disciplinary range of insights, methods and tools from anthropology, psychology, econometrics, and behavioural economics, we are building a deeper understanding of both the contributions and the opportunity costs associated with informality in the context of real evidence about people’s location, migration, livelihood and employment preferences.
The project’s initial research aims revolved around the following main themes:
Sustainable prosperity and quality of life in contexts of uncertainty and mass displacement
Definitions of livelihoods and decision-making in the search for meaningful and productive lives
Identification of pathways to sustainable livelihoods
The role of experimental and empirical evidence in identifying individuals’ preferences
The role of Agent Based Models (ABM) in understanding complex decision-making processes related to employment and livelihoods in contexts of uncertainty
Through a thorough and carefully derived work plan, these aims remain at the forefront of the research activities of the project and expanded on continuously based on project’s developments. The activities of the project have been carefully divided in three (3) main complementary tasks:
Understanding stability, livelihoods and employment in the context of uncertainty: This tasks is focusing on reviewing and analysing existing literature, theories and data in order to comprehend and ascertain the livelihood capacities, assets and opportunities that individuals face in Lebanon as a whole as well as on the fieldwork sites (eg jobs, skills, market conditions, transport, etc). This review included an in-depth analysis of labour laws, academic literature and relevant data collected from various sources (including the latest ILO labour force survey, the World Bank Enterprise Survey, UNHCR data, the ArabBarometer and the UCL Prosperity Index data). In addition to that, extensive focus groups have been conducted in the two fieldwork sites (August-October 2020) with representative participants in order to acquire more in-depth knowledge and qualitative information regarding employment challenges and opportunities. Through this task, the team has been able to map the characteristics of formal and informal employment in the context of Lebanon in three stages. The first step was to use quantitative and qualitative data in order to differentiate between the size of the informal economy in Lebanon and the size of the informal labour markets followed by a careful review of the literature on informality in different contexts. Setting the ground of the characteristics of informal labour markets and employment around the globe allowed for a more comprehensive mapping of the specificities and peculiarities of the Lebanese case and the current uncertainty driven circumstances. Information from this mapping allowed for a more informed structure of the focus groups. Twelve (12) focus group discussions with both employees, self-employed and employers were conducted representing both Lebanese and non-Lebanese citizens. Age, gender and other demographic dimensions were carefully taken into account in the formation of the group. Outcomes of the focus group discussions and literature review suggested informed both the formation of the Discrete Choice Experiment and the Agent Based Model
Discrete Choice Experiment: Livelihood and employment choices are inherently difficult to infer and model as these processes require a very detailed knowledge of the target population’s perspectives and experiences as well as a detailed mapping of relevant cultural, social, economic and demographic characteristics. One of the main aims of this project is to progress beyond current state of the art in regard to measuring such processes through an innovative experimental setting that elicits personal preferences that form and affect livelihood strategies. This experimental framework will be based on the previous task of the comprehensive mapping of the topic and a Discrete Choice Experiment (DCE). The DCE was carefully designed in order to reflect through its attributes and choice sets the characteristics, challenges and opportunities of the labour markets in the Lebanese context. Through the mapping task described above, the team decided to conduct the DCE in two stages: one that reflects the options and choices of employees and one for employers in order to reflect both supply and demand forces of the Lebanese labour markets. Due to covid-19 constraints and lockdown measures both in the UK and Lebanon, the DCE will be run by the team and citizen scientists (CS) in April-June 2021. The survey will be run in two (2) sites Ras Beirut and Mina with the following sampling strategies. There is a minor sampling development in comparison to the original proposal and Bar Elias fieldwork site was replaced to Mina.
Ras Beirut: Surveying 2 cadastres in Ras Beirut: Ras Beirut and Ain eL Mreisseh
sample size for worker DCE: 650 in total
Ras Beirut: Leb-Sample: 244 - Non-Leb sample: 163
Ain eL Mreisseh: Leb-Sample: 188 - Non-Leb sample: 55
sample size for employer DCE: 300 in total
Mina: Surveying 2 cadastres in Mina: Mina 3 and Mina Jardins
sample size for worker DCE: 750 in total
Mina 3: Leb-Sample: 204 - Non-Leb sample: 90
Mina Jardins: Leb-Sample: 220 - Non-Leb sample: 149
sample size for employer DCE: 300 in total
Agent Based Model: One of the main innovations of this project is that the mapping and modelling of individuals’ employment choices is not solely limited to the previous two tasks but also dynamically enhanced by the development of an agent-based model (ABM) that builds on the revealed preferences of the DCE and existing data. The model aims to simulate the formal/informal aspect of job markets in the Lebanese context and test interventions/policies aimed at improving workers economic situation (through scenarios/sensitivity analysis). More precisely, the ABM model will build and expand on the DCE in order to map interrelations of different outcomes- including feedbacks between agents, markets - choices are not only at the individual level. For example, choices that are constrained because one market is flooded driving individuals and businesses to change preferences between formality and informality. Even though, the complete design of the ABM will depend on the outcomes of the DCE, an initial comprehensive ODD protocol has been already defined by the team.
[1] https://www.ilo.org/global/topics/dw4sd/themes/informal-economy/lang--en/index.htm