Share of informal employment in total employment by status in employment 2018
More than 60 per cent of the world’s employed population earn their livelihoods in the informal economy. Informality exists in all countries regardless of the level of socio-economic development, although it is more prevalent in developing countries. The 2 billion women and men who make their living in the informal economy are deprived of decent working conditions. Evidence shows that most people enter the informal economy not by choice, but as a consequence of a lack of opportunities in the formal economy and in the absence of other means of livelihood.
The main challenge for the transition to the formal economy is finding the right policy mix that corresponds to the diversity of characteristics and drivers of informality. Reliable and relevant statistics are needed to better understand these complex aspects of informality and monitor progress towards formalization. In June 2015, the International Labour Conference adopted the Transition from the Informal to the Formal Economy Recommendation (No. 204), the first international labour standard which focuses on the informal economy in its entirety. That same year, in September, the United Nations adopted the 2030 Agenda for Sustainable Development, which included the transition to formality in the targets for Sustainable Development Goal 8. These two instruments represent major milestones in the global approach to formalization, particularly by providing guidance on the process. The ILO has made the formalization of the informal economy one of its strategic outcomes and supports tripartite constituents in facilitating the transition to the formal economy at the national level.
This report forms part of the ILO follow-up plan of action to support the implementation of Recommendation No. 204. It is all the more timely given that the United Nations General Assembly has
recently approved the Global Indicator Framework to monitor the Sustainable Development Goals, including a specific global statistical indicator on informal employment (8.3.1). The report provides for the first time a statistical profile of the informal economy at the global level using a common set of operational criteria to measure informal employment and employment in the informal sector for more than 100 countries, including both developed and developing countries. Statistics on informal employment are disaggregated by sex, age, level of education, status in employment and other socio-economic characteristics.
This is the outcome of joint collaboration by the Employment Policy Department (led by Azita Berar Awad, former Director), the Inclusive Labour Markets, Labour Relations and Working Conditions Branch and the Department of Statistics. It has benefited from valuable inputs from Joann Vanek of the Women in Informal Employment: Globalizing and Organizing (WIEGO) who also contributed to the two previous editions of the Women and Men in the Informal Economy statistical reports. This publication was prepared by Florence Bonnet, Vicky Leung and Juan Chacaltana. It was extensively reviewed in the ILO, benefiting from comments by the following colleagues: Mariya Aleksynska, Coffi Agossou, Yacouba Diallo, Steven Kapsos, David Kucera, Fatime Ndiaye, Frédéric Lapeyre, Jon Messenger, Naoko Otobe, Yves Perardel, Ken Shawa and Judith Van Doorm. Our special appreciation goes to Chris Edgar for his support during the editorial process.