Breaking down the question
The statement makes a claim — that capitalism has brought increasing informalisation of work — and the command "substantiate your answer" asks you to support that claim with argument and evidence. Substantiation is not the same as uncritical agreement; the best answers marshal strong evidence for the proposition while acknowledging its complexities, but the centre of gravity must remain on demonstrating the link.
Two concepts anchor the answer. Informal work refers to employment that lies outside the framework of formal regulation — without secure contracts, legal protection, social security, unionisation or stable wages. Informalisation is the process by which work is progressively shifted from formal, protected forms into these unregulated, insecure forms. The formal and informal are best grasped as two organisations of the same economic life, treated in the note on the formal and informal organisation of work.
The intellectual task is to explain the mechanisms by which capitalism, especially in its contemporary global phase, drives this shift. You must connect the logic of profit and competition to concrete processes — subcontracting, casualisation, the flight from labour regulation, the gig economy — and support each with evidence. A candidate who merely asserts that informal work is large in developing countries has described a fact without substantiating the causal claim the question makes.
How to approach it
Begin by defining informal work and informalisation and stating the thesis clearly: that the dynamics of capital accumulation actively generate informality rather than merely tolerating it. This reframes informality from a leftover of underdevelopment into a product of capitalism itself.
Then substantiate through mechanisms. Show how the drive to cut labour costs and maximise flexibility leads capital to subcontract, outsource and casualise; how global competition and the shift to flexible accumulation erode standard employment; how the retreat of the regulatory state and the rise of platform work extend informality even in advanced economies. Support each mechanism with evidence — the swelling informal sector of developing economies, the growth of precarious and gig labour worldwide, the feminisation of insecure work.
Bring in thinkers: Marx on the reserve army of labour, Jan Breman on informalisation in the global South, Guy Standing on the precariat. Then add analytical balance — noting that informality also has pre-capitalist and structural roots, and that the state's role matters — before concluding that the weight of evidence substantiates the claim.
Model answer
The claim that capitalism has brought increasing informalisation of work can be strongly substantiated, provided informality is understood not as a residue of pre-modern backwardness that capitalist development will eventually absorb, but as a condition that the logic of capital accumulation actively produces and reproduces. Informal work is that which stands outside the protective framework of formal employment — lacking secure contracts, statutory rights, social security, stable wages and collective representation. Informalisation is the ongoing process by which work is pushed out of protected forms into these insecure ones. The evidence from both developing and developed economies indicates that contemporary capitalism, far from steadily formalising labour, has intensified informality.
The foundation of the argument lies in Marx's analysis of capital. Capital accumulates by extracting surplus value from labour, and it is driven by competition to reduce the cost of labour wherever possible. Marx identified the reserve army of labour — a floating mass of the unemployed and underemployed — as functional to capital, holding down wages and disciplining the employed workforce. Informal labour is, in large part, this reserve army in active use: cheap, disposable, unprotected and available. The very rationality of the system tends to convert secure, expensive, regulated labour into insecure, cheap, unregulated labour wherever it can.
The first mechanism through which this occurs is subcontracting and outsourcing. Rather than employing workers directly under the obligations of formal employment, capitalist firms devolve production to a chain of contractors, sub-contractors and home-based workers who bear the costs and risks. The visible formal firm at the apex rests on an invisible informal base. Jan Breman's studies of labour in India show precisely this — a vast footloose labour force, drawn from the countryside, working in construction, brick kilns, workshops and services under conditions of extreme insecurity, tied to capital through contractors rather than contracts.
The second mechanism is casualisation and the erosion of standard employment. Under pressure of global competition, firms replace permanent workers with temporary, contract and daily-wage labour, so that even within the formal sector a growing share of jobs becomes informal in substance. David Harvey's account of the shift from rigid Fordist mass production to flexible accumulation captures the structural change: capital now demands a flexible, numerically adjustable workforce, and flexibility for the firm means insecurity for the worker.
The third mechanism is globalisation and the mobility of capital. When capital can move across borders in search of the cheapest and least regulated labour, states compete to attract it by weakening labour protections, deregulating markets and tolerating informal arrangements. Special economic zones, export-processing industries and global supply chains have expanded a workforce that is formally employed for a global market yet informally treated, often young, migrant and female — the feminisation of labour has gone hand in hand with its informalisation, since women are concentrated in the most precarious segments.
The fourth mechanism, and the clearest sign that informalisation is a property of capitalism rather than of underdevelopment, is the growth of precarious and platform work in the advanced economies. Guy Standing has described the emergence of a new class, the precariat, defined by chronic insecurity, absence of occupational identity and the loss of the rights that the standard employment relationship once carried. The gig economy — ride-hailing, delivery, online task work — organised through digital platforms, converts what might have been employees into nominally self-employed contractors stripped of protection. That informalisation should advance in the heartlands of mature capitalism, and not only in its periphery, is powerful substantiation of the causal claim.
The evidence, then, is substantial. In much of the global South the informal sector accounts for the majority of the workforce, and its share has grown rather than shrunk with economic liberalisation. In the global North the standard, protected job has ceased to be the norm for a rising proportion of workers. Both trends point in the same direction and share the same driver — the search of capital for cheaper, more flexible, less obligated labour.
Analytical balance requires two qualifications, which strengthen rather than weaken the argument. First, informality is not created by capitalism alone; it also has roots in the sheer size of surplus agrarian labour, in weak state capacity, and in pre-capitalist forms of household and petty production that capitalism incorporates rather than invents. Second, the trajectory is not iron law: where labour movements are strong and the state actively regulates, informalisation can be resisted or reversed, which shows that the outcome is a matter of political contest and not of economic destiny alone. But these qualifications refine the thesis; they do not overturn it. The dominant tendency of contemporary capitalism, left to its own logic, is to informalise. On the weight of the evidence, the statement in the question is well substantiated: capitalism, especially in its globalised and flexible phase, has brought an increasing informalisation of work.
Examiner's perspective
The command "substantiate" is decisive, and the examiner rewards candidates who treat it seriously by supplying mechanisms and evidence rather than assertions. A weak answer states that the informal sector is large in developing countries; a strong answer explains why capitalism generates informality — through subcontracting, casualisation, capital mobility and platform work — and supports each claim.
The single most impressive move a candidate can make is to show that informalisation advances in the developed economies too, through the precariat and the gig economy. This defeats the common misconception that informality is merely a symptom of underdevelopment and demonstrates that it flows from the logic of capital itself. Marx's reserve army, Breman on Indian labour, Harvey on flexible accumulation and Standing on the precariat are the authorities that lift the answer.
Because "substantiate" leans towards agreement, the examiner does not expect a symmetrical debate, but the best scripts still add a note of qualification — that informality has structural and pre-capitalist roots and that state and labour action can check it — before reaffirming the thesis. This shows analytical maturity without diluting the substantiation the question requires.