Labor policy implementation in informal sector during COVID-19

The informal economy is the set of diversified economic activities where workers have limited access to labor welfare services given by the state. The informal sector has a great capacity to resolve the increasing problem of unemployment, especially in developing countries. A persistent gap exists in the literature that arouses the interest of researchers to examine the policy implementation concerning important demographic variables of households. In this connection, the current research has been conducted to investigate the labor policy implementation in the informal sector of Pakistan using primary data taken from division Bahawalpur, Pakistan. The data was collected through face-to-face interviews of 240 individuals by using multi-stage random sampling, and the logit model was applied to analyze the data. Empirical results of the study showed positive and significant relationship among occupation of the respondent, age of respondent, number of adults in the household, relation with local governance, education of the respondent, the income of the household, male-female ratio, kind of house and average education of the household on labor policy implementation in the informal sector of Pakistan. However, there the two variables (age and loan) are statistically insignificant to labor policy implementation. In the light of empirical results, the current study suggested that the awareness and level of education help to proper implementation of labor policy in the informal sector which directly affects the well-being of the people. Furthermore, Government should provide interest-free loans at the micro level to enhance economic empowerment. This study will also be helpful to the policymaker to develop better policies for the implementation of labor policy in the informal sector of Pakistan, as the informal sector of Pakistan's economy represents the major share in the country's GDP.