Between Survival and Choice: A Conceptual Framework of Informal Employment Participation in Malaysia

Informal employment remains a significant feature of Malaysia’s labour market, yet its participation is often explained through a simplified distinction between survivalist necessity and voluntarist choice. This conceptual paper argues that such a binary explanation is insufficient for understanding the diverse realities of informal workers in Malaysia. Drawing on informal employment literature, recent DOSM statistics, Malaysian evidence on informal entrepreneurship, gig work, women micro-entrepreneurship, caregiving, youth employment challenges, and platform labour protection, a continuum-based conceptual framework of informal employment participation is proposed. Three broad positions are identified: survivalist informality, constrained voluntarism, and voluntarist informality. The concept of constrained voluntarism is introduced to explain workers who appear to choose informal employment for flexibility, autonomy, or income opportunity, but whose choices are bounded by economic insecurity, household responsibilities, weak social protection, limited formal employment opportunities, skills mismatch, financial constraints, platform dependency, migrant status, or institutional barriers. The paper also considers recent policy developments, including the Gig Workers Act 2025, and highlights the need to recognise non-citizen and migrant workers within discussions of informal employment protection. It is argued that this framework provides a clearer understanding of informal employment by recognising both workers’ choices and the structural constraints they face. The paper contributes by offering a Malaysia-focused conceptual framework that may guide future empirical research and inform more targeted labour market policies.