Wage differentials within a female‐dominated occupation: Domestic workers in informal and flexible jobs in Portugal

• DOI: http://doi.org/10.1111/ilr.12065
• Published date: 01 March 2018
• Author: Maria da Conceição FIGUEIREDO,Fátima SULEMAN
• Date: 01 March 2018

International Labour Review, Vol. 157 (2018), No. 1

Copyright © The authors 2018

Journal compilation © International Labour Organization 2018

* Instituto Universitário de Lisboa (ISCTE-IUL), DINAMIA’CET, Lisboa, email: Fatima.

Suleman@iscte-iul.pt (corresponding author) **

Instituto Universitário de Lisboa (ISCTE-IUL),

BRU-IUL, Lisboa, email: Conceicao.Figueiredo@iscte-iul.pt. This research was possible thanks to

data collected within Domestic Work and Domestic Workers: Interdisciplinary and Comparative

Perspectives project granted by FCT – Foundation of Science and Technology, of the Ministry of

Education and Science PTDC/JUR/65622/20 06. We have beneted from helpful comments on

earlier versions of this study by ESPE Conference participants at the University of Minho, Braga,

Portugal, June, 18-21, 2014, Luís Martins and Sérgio Lagoa are thankfully acknowledged for their

invaluable comments and suggestions.

Responsibility for opinions expressed in signed articles rests solely with their authors, and

publication does not constitute an endorsement by the ILO.

Wage differentials within

a female-dominated occupation:

Domestic workers in informal

and exible jobs in Portugal

Fátima SULEMAN* and Maria da Conceição FIGUEIREDO**

Abstract. The authors use an original cross-sectional data set to examine the im-

pact of informal and exible contractual arrangements on the wages of domestic

workers hired by private employers in Portugal. OLS estimations suggest that for-

mality benets workers, whether they have a stable or a exible contract. However,

social and labour market processes help to shape and maintain inequality, espe-

cially for migrant workers. Although skills are undervalued and do not generate

rewards, higher wages are identied for workers who are engaged in contingent

work, work for multiple employers or provide care for the elderly. However, such

workers are still subject to exploitation and insecurity.

The Employment Relationship Recommendation, 2006 (No. 198) and the

Decent Work Agenda (see ILO, 2002) are examples of initiatives in-

tended to guarantee the protection of workers’ rights in labour law and regu-

lations, including collective agreements. These initiatives also strive to bring

more hidden types of employment relationship under the protection of the

law. However, an assessment of the impact of these initiatives has not yet been

made in the literature. The present article is intended to ll this gap and offers

empirical evidence of how compliance with regulations affects labour market

outcomes for domestic workers in Portugal.

Domestic work is an economically and socially signicant form of em-

ployment and efforts have been made to guarantee protection of the rights

International Labour Review130

of domestic workers through labour laws and regulations. Portugal is among

the European countries that have adopted specic legislation to regulate do-

mestic work and where domestic workers are entitled to the minimum wage.

Portugal ratied the Domestic Workers Convention, 2011 (No. 189) in 2015

and national authorities have taken active steps to develop and disseminate

information on the legal rights and legislation that is applicable to domes-

tic work, in accordance with the Domestic Workers Recommendation, 2011

(No. 201) (GAMI, 2012).

However, the working conditions of domestic workers in Portugal are

still far from satisfactory, and a number of questions remain. More specically,

these questions include the following: How do the characteristics of contractual

arrangements affect the wages of domestic workers? Does compliance with

labour market regulations have an impact on the working conditions of do-

mestic workers, and particularly on their wages? Is there a wage gap between

formal and informal work? Are there differences within formal and informal

work, especially with regard to exible arrangements?

We examined the impact of contractual arrangements on the wages of

a sample of domestic workers in Portugal (684 workers in total), where do-

mestic workers are typically hired by private families through a variety of ar-

rangements. For our study, two specic characteristics of this particular labour

market were examined, namely (1) declaration (formality), i.e. registration

of the employment relationship with the social security authorities, vs. non-

declaration; and (2) job stability vs. exibility.

In Portugal, hourly and daily payments mean that exibility is a regular

feature of contractual arrangements, while a system of monthly wages can be

used to develop a more stable (lasting or continuous) employment relation-

ship. All employers and employees are required to declare the employment

relationship to the social security authorities, meaning that they are bound to

formalize the relationship. This article therefore focuses on four types of con-

tractual arrangements: declared and stable; undeclared and stable; declared

and exible; and undeclared and exible.

The adopted strategy parallels those of Mocan and Tekin (2003) and

of Tansel and Kan (2012), which assumed multiple dimensions of contracts.

The “treatment effect model” (Wooldridge, 2010) was adopted in the empiric-

al analysis to deal with the imprecise and inconsistent estimates originating

from the ordinary least squares (OLS) earnings model. It was assumed that

domestic workers can select, or at least accept, their contractual arrangement,

and the research therefore followed Deb and Trivedi (2006a, 200 6b) in that

it uses a treatment-outcome model for the multinomial choice of contractual

arrangement.

It was thus possible to determine whether good (bad) working condi-

tions, proxied by the characteristics of contracts, correlated with higher (lower)

wages. However, we argue that social and labour market processes have shaped

inequality and that wage differentials reect the structural disadvantages preva-

lent in domestic work. Domestic work is a female-dominated occupation,