Informality: Definition and World Data
Informal employment, or what is commonly referred to as the informal economy, can be understood as “all remunerative work (i.e., both self-employment and wage employment) that is not registered, regulated or protected by existing legal or regulatory frameworks, as well as non-remunerative work undertaken in an income-producing enterprise”. In general, informal employment includes six categories of informal jobs: (1) self-employed workers with no employees in their own informal enterprise; (2) self-employed workers with employees in their own informal enterprise; (3) contributing family workers; (4) members of producers’ cooperatives not recognised as legal entities; (5) employees having informal jobs that are not subject to national labour legislation, income taxation, social protection and benefits; and (6) workers producing goods for their own use by their household. In other words, informal workers are defined as such if their job is not regulated by formal arrangements between employer and employee and is not subject to national labour legislation and protection. This exclusion from the mainstream economy means not being able to access the rights and benefits offered by the state, making informal workers vulnerable, voiceless, powerless, and unprotected.
There are around two billion people who earn their living in the informal economy; 93% of these people live and work in developing countries. Africa has the highest percentage of informal employment with 85.5%, followed by the Arab States with 68.8%, Asia and the Pacific with 68.2%, the Americas with 40%, and Europe and Central Asia with 25.1%4 (Figure 1). Of these people, vulnerable groups such as women or youth are more likely to be trapped in the informal economy. In particular, the lack of education, skills, and training usually prevent these groups from accessing the formal labour market. As a result, informality for these people means………………………………..