Choices and Rules in Informality : A case study on public policy implementation and obstacles to formalizing the domestic work sector in Argentina

Abstract: This study reviews Rational Choice theory and Informal Institutions theory and uses new data to explain the persistence and scale of Argentina's informal domestic work sector. The domestic work sector in Argentina represents a typical case in Latin America: almost entirely dominated by women and high informality levels. The sector has had legal recognition for over a decade, but most of the sector's workers work under precarious conditions without access to those stipulated rights. In line with the adoption of new feminist policies during the last decade in Argentina, recent governments have brought more attention to women working in the domestic sector. This study investigates the implementation of a current financial incentive called Registradas which aims to increase registration levels in the domestic work sector. The material was collected during 29 weeks in Buenos Aires through interviews, surveys with employers, and observational studies from a Facebook group with domestic workers. The findings suggest that the two theories complement each other. Employers and employees in the domestic work sector act rationally from self-interest. However, unwritten rules, expectations of others' behavior, and perceptions of domestic work as an occupation also influence both groups' perceptions of choice and cost evaluation. These unwritten rules restrict and disadvantage employees due to power imbalances, gender norms, lack of information about their labor rights, and poverty. Finally, the study found that the program Registradas has had little effect on the sector's informality rates. The RCT suggests that the low impact could be due to formal employment not being a costly beneficial choice for the employers and neither the employees. This conclusion, however, needs to be understood in a context where labor laws and social security are not systematically and effectively enforced. Weak formal institutions thus enable a competing informal institution of informal employment and, ultimately, costs and benefits of the available choices for employers and employees.