The Informal Economy Worldwide: Trends and Characteristics

It has now been more than 40 years since the first attempts of defining and data collection on informal sector and informal employment on a large scale were launched in the early 1970s. Many debates paved the way for the international definition of the informal sector in 1993 and informal employment in 2003. The informal economy is finally a means for conciliating the two concepts and since the mid-1970s, national estimates of size (employment) and contribution (share of gross domestic product [GDP]) of the informal sector, and later on of the informal economy (and of its two major components: informal sector and employment outside the informal sector), have regularly been attempted and gathered on a large scale. This article is the most recent synthesis of these works. It is based on the recent compilations by the Bureau of Statistics of the International Labour Organization (ILO) and the National Accounts Section of the United Nations (UN) Statistics Division as well as on original national data. Employment in the informal economy is revealed to be as high as 58–70 per cent of non-agricultural employment at regional level (the informal sector representing from 50 per cent to 80 per cent of the informal economy) and the informal sectors contribution to non-agricultural GDP is from 25 per cent up to 50 per cent.JEL Classifications: O17, O57, J21