Informality – referring to work that takes place either in informal economic units or through informal employment relationships, including within formal firms, and is not adequately covered by labour regulation, taxation or social protection – remains the norm across low- and middle-income countries, affecting the daily lives of billions of workers and their families across the world. This comes with considerable risks and vulnerabilities. Global trends, such as demographic changes, automation and climate risks, further intensify existing vulnerabilities. Securing the livelihoods of informal workers is central to achieving the Sustainable Development Goals (SDGs) and calls for careful monitoring and evidence-based policy responses.
Understanding labour informality has been at the heart of research and policy work since the creation of the OECD Development Centre. An important milestone includes the compilation, since 2017, of the Key Indicators of Informality based on Individuals and their Households (KIIbIH) database – the OECD Development Centre’s innovative and comparable data on informal employment. KIIbIH data support the analysis and monitoring of the informal economy across countries and has underpinned several recent OECD Development Centre publications, including: Tackling Vulnerability in the Informal Economy (2019); Informality and Globalisation: In Search of a New Social Contract (2023); and Breaking the Vicious Circles of Informal Employment and Low‑Paying Work (2024). These reports and their policy recommendations have helped countries develop local strategies to tackle informality and have informed actors in various national and international fora, including the Global Partnership for Universal Social Protection (USP2030) and various standard-setting discussions at the International Labour Organization (ILO).
This latest report highlights the role of diverse policy instruments in tackling the informality challenge and in protecting informal workers and their families from the adverse effects of major global trends. First, it provides up-to-date and detailed portraits of informality in developing and emerging economies, applying a unique cross-country comparative perspective that identifies both common trends and country specificities. Second, it assesses the impact of global trends – such as ageing, automation and environmental degradation – on the opportunities and vulnerabilities of informal economy workers. In turn, the report provides detailed policy recommendations, underscoring the centrality of the social contract in mediating these impacts, the need for locally-led approaches and the importance of policy coherence.
Securing the livelihoods of informal economy workers in times of global changes was developed in the context of the OECD Development Centre’s project “Informal employment in changing societies: Harnessing the potential of formalisation to support inclusive transitions”, with financial support from the Swedish International Development Cooperation Agency (Sida).