About the Informal Economy
Links Between Poverty, Gender and Informality
Figure 1 shows the segmentation of informal employment by average earnings and sex which contribute to a significant gender gap in earnings within the informal economy.
Figure 1
Segementation of Informal Employment by Average Earnings and Sex
Source: Chen et al. 2005.
Just as there is a hierarchy of earnings, there is a hierarchy of poverty risk associated with the segmentation of the labour force. Households that rely exclusively on income from informal employment face far higher poverty rates than those that rely exclusively on income from formal employment, as illustrated in Figure 2. And households that depend on the most precarious forms of informal employment are likely to have substantially higher poverty rates than those that have access to more stable or better quality employment, even within the informal economy, as illustrated in Figure 3.
Figure 2
Poverty Risk of Households by Sources of Income
Source: Chen et al. 2005.
Figure 3
Poverty Risk of Households by Primary Source of Income
Source: Chen et al. 2005.
