The challengeThe size of the informal economy in the region is between 25 per cent and 35 per cent of GDP, as compared to an average of 18 per cent in the EU27. Undeclared and underdeclared work is widespread, and many small Enterprises are informal. Informality leads to low productivity, limited quality of public services, unsustainable social security systems and decent work deficits. Despite significant efforts to strengthen Labour inspectorates and to cut red tape for registering a businesses and workers, formalization policies remain fragmented. In addition, new forms of employment are surfacing that call for legal frameworks which preserve workers’ rights while giving enterprises flexibility to adapt to rapidly changing environments.
- Tested tailor-made packages to overcome informality in a specific industry or sector.
- Customised technical assistance and tools to support informative and punitive actions taken by labour inspectors to tackle informality.
- Behavioural change campaigns using rigorous testing and evaluating impact.
- Producing evidence for policymaking by carrying out monitoring and evaluation studies of the initiatives that have been undertaken.