The Informal Sector in Cuernavaca

Fieldwork in Cuernavaca, Mexico is used to explore the conditions under which firms are compelled to remain informal or formal, and in some cases why they function in between. This approach is helpful in directing attention to a phenomenon not ordinarily examined by economists and planners. Understanding why in some cases ' firms remain informal, and in other cases formal, serves as tool for formulating different policies for various occupations within the informal sector. Interviews and time spent with informal sector participants showed that informality is not so much a question of legality, but rahter a continuum. In this sense, it became evident that formal firms also engage in illegal transactions that points to a more varied and complex situation. In this respect, some of the major findings are that people who engage in informal activities for survival tend to operate in situations of total illegality because their activities tend to be unstable and, therefore less profitable