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Informal Economy & WIEGO

Waste Picker Video Series: Chronicle of a Fight for Inclusion

Waste Picker Video Series: Chronicle of a Fight for Inclusion

About the Series

(Text in Spanish follows the English version)

Concepts, Definitions & Methods

This section of the website provides interested users of statistics on informal employment with information to maximize the use of available data and to begin discussions with producers of these statistics to better meet their data needs. Dialogue and collaboration between statisticians and users of statistics is key to producing timely data that informs policy. (See, for example, "Improving statistics on informal employment in India: the role of users.") 

WIEGO Network: Holistic Framework

Composition

Six-Segment Model by Status of Employment

In the International Classification of Status of Employment, five statuses of employment – employer, employee, own account worker, unpaid contributing family worker, and member of producer cooperative – are defined by the type/degree of economic risk (of losing job and/or earnings) and of authority (over establishment and other workers).

Links with Growth

This section explores the two-way linkages between informality and growth: the impact of the informal economy on economic growth, and the impact of economic growth on the informal economy. How much and in what ways does the informal economy contribute to economic growth? Or does the informal economy account for low productivity and low growth? Does the size of the informal economy shrink during economic growth and expand during economic slumps or downturns? Is it, in other words, counter-cyclical or pro-cyclical?

Links with Economic Crises

Economic crises lead to increased unemployment through loss of jobs in the formal economy and to increased employment – through new entrants – in the informal economy. For example, recent estimates by the International Labour Organization (ILO) suggest informal employment in Colombia, Ecuador, Mexico, Panama, and Peru  increased from 52.9 per cent of total employment in 2007 to 53 per cent in 2008 and 53.6 per cent in 2009 (ILO 2009a).

Elba Rojas, Street Vendor in Lima, Peru

(Lima, November 2013) For 25 years, Elba Rojas has sold chilis in Lima’s thriving wholesale market, La Parada. She says selling fresh produce here provided more income than she could have earned in a factory.Street vendor in Lima

Challenges of Gathering Statistics on Street Vendors

Finding reliable data on the size of the street vending population in any given city can be challenging. Official statistics on street vendors are available only in a few countries. The box below explains.

Informal Economy Debates: Dominant Schools of Thought

Over the years, the debate on the informal economy has crystallized into four dominant schools of thought regarding the causes, composition, and nature of the informal economy, and what should be done about it. There is merit to each of these perspectives, but each school reflects just a “slice of the (informal) pie.” The informal economy as a whole is more heterogeneous and complex than the sum of these perspectives would suggest.