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At issue in the debate over home employment is whether paid work performed in the home exploits workers or enables them to decide when and where to do their work. Converting the terms of the debate into a set of variables, I compare blue‐collar workers in manufacturing industries by work location. Although observed differences are open to varying interpretations, I conclude that as a group the home workers in this sample may be choosing to work at home. However, my analyses also demonstrate the diversity of home working arrangements, and that worker's ‘choices’ are socially shaped such that home employment has different meanings and consequences for different groups of workers. I further argue that the exploitative potential in home work cannot be dismissed because the findings are controversial, and the sample most likely underrepresents home workers, especially those most vulnerable to exploitation. Evidently, more research is necessary on the diversity of home working arrangements and their implications.

Informal economic activities appear to constitute a growing component of all economic transactions in the US and some other industrialized nations, despite the traditional view that such activities would dissipate with advanced capitalism (cf Castells and Portes 1989, Tanzi 1982). The study of these activities, particularly by sociologists, has likewise grown in recent years. For example, at the 1995 ASA annual meetings in Washington DC, a formal session was devoted entirely to such work, an annual feature of recent vintage. That year's session produced some six papers, five case studies with a US focus and a general typology on informal work, which are reviewed here. As a group, these papers provide numerous insights into various aspects of informal work in the US. Yet, in the end, they raise at least as many questions as they answer, no doubt a reflection of the infancy of the field of study.

It is fascinating to think about the growth of the literature on the informal economy since Hart and Ferman and Ferman first considered the problem in very different contexts in the early 1970's. In fact some intellectual history would probably be appealing for students of this literature. Irrespective of the knowledge gained from conducting an intellectual history, social scientists should be aware that many, if not most, of the empirical and theoretical problems they study have roots in different philosophical problems (Leaf, 1979). The “informal” economy is no exception. To situate the following collection of articles on the informal economy in one useful philosophical context, I will discuss in this introduction two distinct strategies of social science investigation. Having spelled out these strategies, I will then consider how each of the papers stands in relation to them.

This article uses the case of paid domestic work in Los Angeles to argue that affluent and middle‐class members of U.S. society constitute important participants in the informal economy. In‐depth, tape‐recorded interviews conducted with thirty‐five employers of nannies and house cleaners, and survey responses of 154 Latina house cleaners and nannies shows that compliance with government regulations, as indicated by payment of Social Security, Medicare and federal tax withholdings, are rare. Affluent citizens may not directly depend on informally generated income, but as employers of paid domestic workers and nannies, they do depend on informally organized and remunerated services. Employers of paid domestic workers rely on three major narrative strategies to distance themselves from the regulations, arguing that the standards should be followed by certain categories of people (attorneys, celebrities, the very wealthy), that the regulations apply only to those employing full‐time help, and that the regulations are illegitimate because both undocumented workers and the state lack legitimacy. These rationalizations allow them to simultaneously condemn Zoe Baird and yet follow the same practices. Upgrading the occupation requires state support and the education of employers. This process would lead to greater recognition of paid domestic work as an occupation, one that merits the protections and regulatory guidelines governing other jobs.