This paper assesses whether the growth of informal construction employment and
activities in Tanzania are a boon or bane for informal workers. It examines the
importance of employment and income provision, employment conditions, and
linkages between formal and informal firms. It also examines the determinants of
earnings of workers and the challenges faced by the informal construction sector. The
study finds that informal construction activities are important in providing
employment and income to people, although a significant number of employees work
without contracts and pensions. The level of informal sector earnings is also lower
than that of the formal sector. The statistically significant results from regression
analysis of the determinants of earnings, which are positively related to earnings are:
age, education level, and number of years of experience. The policy implications of this
study include: the need for informal construction employees to be affiliated to pensions
and health insurance benefits; requirement of a mechanism to enable them to
formalize easily in order for them to access credit and to expand their operations;
improvement in their skills to enhance their income levels so as to reduce poverty; and
to empower them to share in the growth of construction activities.