Selected for the Global Economic Symposium 2010

Informality is a way of life throughout the developing world. In poor Sub-Saharan African countries, the informal sector employs the vast majority of the non-agricultural labor force. Informal jobs continue to account for a high share of employment in the middle-income Latin American countries, pointing to the persistence of the phenomenon. The current economic crisis is likely to cause a further surge of informal employment due to job losses in the formal sector.

Even though informality appears in many different guises, informal workers tend to have in common that they earn less than formal workers and that 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 and health problems, unsafe working conditions and possible loss of earnings due to sudden dismissal.