Informal economy

The informal economy comprises half to three-quarters of all non-agricultural employment in developing countries. Although it is hard to generalize concerning the quality of informal employment, it most often means poor employment conditions and is associated with increasing poverty. Some of the characteristic features of informal employment are lack of protection in the event of non-payment of wages, compulsory overtime or extra shifts, lay-offs without notice or compensation, unsafe working conditions and the absence of social benefits such as pensions, sick pay and health insurance. Women, migrants and other vulnerable groups of workers who are excluded from other opportunities have little choice but to take informal low-quality jobs.

The Resolution concerning decent work and the informal economy adopted by the International Labour Conference in June 2002 called for the needs of workers and economic units in the informal economy to be addressed, with emphasis on an integrated approach from a decent work perspective. The ILO has set up mechanisms to collect and share lessons from good practice and policy across the four strategic objectives and different regions with a view to improving "know how" and "show how".


  1. © Jonathan Ernst / World Bank 2017

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