Understanding Urban Informality in Iraq : Findings from the Informal Sector Enterprise Survey

In Iraq, like many countries around the world, the informal sector is a major contributor to employment and business activity. The Iraq Labor Force Survey (LFS) of 2021 estimated that more than half of the workers in the country do not contribute to social insurance, consequently informal. Recent surveys conducted by the Central Statistics Organization (CSO) and the Kurdistan Region Statistics Office (KRSO) in collaboration with the United Nations Development Program (UNDP) found that 80 percent and 60 percent of businesses, respectively, are not registered with any public entity, consequently informal. Recognizing the prevalence of this sector and its role in people's earning and consumption, this report extends the knowledge about Iraq's urban informality through a new survey. The Informal Sector Enterprise Survey (ISES) was led by the World Bank, with the objective of further illuminating the characteristics of urban informal businesses and their workers. It was conducted in four key cities: Baghdad, Basrah, Najaf and Sulaymaniyah. It is complemented by two other World Bank surveys fielded around the same time: the World Bank Enterprise Survey (WBES) and the Micro-enterprise survey of 2022, both of which focus on formal businesses. The next sections are organized as follows. Section II explains the data collection process and final sample. Section III highlights the key findings. Section IV proposes some key policy and program priorities to improve the lives of the people who work in the sector and the performance of the businesses. Section VII concludes with a few remarks on the potential for future research on Iraq's informality