Defining informality vs mitigating its negative effects : more important than defining and measuring informality is focusing on reducing its detrimental consequences

Elizabeth Ruppert Bulmer

There are more informal workers than formal workers across the globe, and yet there remains confusion as to what makes workers or firms informal and how to measure the extent of it. Informal work and informal economic activities imply large efficiency and welfare losses, in terms of low productivity, low earnings, sub-standard working conditions, and lack of social insurance coverage. Rather than quibbling over definitions and measures of informality, it is crucial for policymakers to address these correlates of informality in order to mitigate the negative efficiency and welfare effects.

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Year of publication:	August 2018
Authors:	Bulmer, Elizabeth Ruppert
Publisher:	Bonn : Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA)
Subject:	definition of informality \| informal employment \| measurement \| correlates of being informal \| Informelle Wirtschaft \| Informal economy \| Messung \| Measurement \| Informationsökonomik \| Economics of information \| Definition \| Informationswert \| Information value