Study Shows Street Vendors Earn More Than Those With Regular Jobs

A street vendor in Pakistan earns monthly Rs. 114,708 on average, of which 29 percent is profit, according to a study.

This was revealed in a study titled “Revitalization of Street Economy in Pakistan: The Case of Islamabad” presented by Dr. Nasir Iqbal and co-authors on the second day of the Research for Social Transformation and Advancement (RASTA) program on Tuesday. The event was organized by the Pakistan Institute of Development Economics (PIDE), in Islamabad.

According to the study, the formal market also gets a positive spillover effect from the traffic attracted by the street vendors. It recommended that strong linkages are necessary for substantial gains.

The study also explored the legal and economic dynamics of Street Economy (SE) in Islamabad Capital Territory (ICT).

“Pakistan has a large street economy operated by individuals and micro-enterprises across the country, mostly in urban areas. There are no precise estimates on the quantum of SE due to the informal nature in Pakistan. It is vital to gauge the contribution of SE to the overall economic landscape of the country due to the overwhelming involvement of individuals and micro-enterprises,” the report highlighted.

It added that the street economy helps to bring hidden employment and economic contribution to the national statistics.

A number of Pakistani scholars and researchers presented their papers on this occasion.

Associate Professor at Quaid-i-Azam University, Dr. Anwar Shah, also presented his research titled “Informal Markets and Competition: An Analysis of Barriers to Entry of Legal Framework and Behavioral Attitude towards Khokha Markets in Pakistan.”

In his research, Dr. Shah highlighted that khokas (small vendor shops) are very essential to the informal economy in Pakistan.

“Khokas are key segments of the informal economy in Pakistan, as they provide jobs to many people and facilitate consumers in doing various types of transactions,” Dr. Shah said.

He, however, said that barriers to entry put a bar on such access, leading to inefficiencies.

“The elimination of barriers to entry is important for promoting competition in the market and enhancing the welfare of people,” he added.

Dr. Ahmed Waqar Qasim of the Pakistan Institute of Development Economics presented his unique study, titled “Sludge: The Administrative Burden.”

Sharing the findings of his report, Dr. Qasim defined ‘sludge’ as unjustified frictions that make it difficult for people to achieve what they want.

“Frictions that make processes unnecessary difficult, and unwarranted interaction between citizens and public institutions all come under the definition of sludge,” he said.

He quoted examples of complicated application processes, duplicative paperwork, various attestations, and so on.

“Why does it matter? It matters because it limits growth. It is distributive and reinforces inequality and sludge can also be employed for rent-seeking,” he said. He quoted PIDE findings to reveal in various sectors, sludge at the national level costs Pakistan 39 percent of its GDP.