Inclusive societies and development

Is Informal Normal? Messages, figures and data



Messages and Figures


How common is informal employment ?

Informal work is the norm in low and most middle-income countries, and is also sizeable in some high-income economies. In several cases, the share of jobs performed outside a country’s formal structures may be more than half of all non-agricultural jobs, and up to 90 percent if agricultural jobs are included. Moreover, in places like South Asia and Latin America economic growth over the past 20 years was accompanied by increasing, not falling, rates of informal employment.



Did You Know?

Out of a global working population of 3 billion, nearly two-thirds (1.8 billion workers) are informally employed.




What problems are associated with informal work?

Generally, informal workers earn less and their basic rights are more vulnerable and difficult to defend. Informality can be a major cause of poverty as most informal workers are insufficiently protected from illness or health problems, unsafe working conditions and possible loss of earnings due to sudden dismissal. This is particularly important for the poor, whose labour is their most significant asset. Persistently high levels of informal employment also reduce fiscal revenues and the state’s ability to develop social security systems.


  Over 700 million informal workers
live in extreme poverty, surviving on less than $1.25 per day.

  Did You Know?

During Argentina’s 1999-2002 economic crisis the country’s economy shrank by almost one-fifth, while the share of informal employment expanded from 48 per cent to 52 per cent and urban poverty rose from 2 per cent to 10 per cent.

  90% of technical and vocational training in Africa is provided by the informal sector.


How will the crisis affect informal employment?

Past experience suggests that the current economic crisis will lead to rising poverty levels in poor countries, as they lack the means to provide comprehensive safety nets. The share of informal employment also tends to increase during economic turmoil: job losses in the formal sector will lead to a surge in informal employment, depressing wages and incomes as the majority of the poor depend exclusively on labour for their survival.

How can we deal with rising informal employment?

In the current context of economic crisis, immediate and unconventional action is urgently needed to prevent the likely surge in unemployment and insecure, poorly paid jobs from increasing poverty around the world. While formalization should remain the ultimate objective, a comprehensive package of actions should also promote good quality job creation in the informal sector. These measures should boost public works, micro-credit and conditional transfer programs in order to improve infrastructure, skills development, institutional reform and access to resources for informal businesses.


Data on informality and self-employment

  • Table 1: Share of Informal Employment in Total Non-Agricultural Employment
  • Table 2: Trends in self-employment and female self-employment by region
  • Table 3: Contribution of informal sector to GDP in various developing countries (2000, 1990s, 1980s)


Download the above tables in Excel format (.XLS, 657 KB) or in PDF format (.PDF, 664 KB)



Informal Employment and GDP motion chart:



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