Skip To Content

Understanding the Informal Economy

OVERVIEWWhat is the Informal Economy?

The informal economy is made up of all the workers, economic activities, enterprises and jobs that do not benefit from state protections.

Read More Frequently Asked Questions

HOW BIG IS THE INFORMAL ECONOMYThe majority of the world’s workforce is informal

  • 9 in 10

    workers in low-income countries are in informal employment

  • 55%

    of women who work, work in informal employment

  • 47%

    of workers in informal employment are own-account workers

OCCUPATIONAL GROUPSA significant proportion of urban informal employment around the globe falls into these four occupations: domestic workers, home-based workers, street vendors and market traders, and waste pickers.

These are also occupational groups where women are often over-represented. Although working conditions and earnings vary, workers in informal employment have this in common: they aren’t recognized or adequately protected under labour laws, nor can they access employment benefits or protections.

  • Domestic Workers

    Domestic workers are employed to provide services for households. There are over 76 million domestic workers in the world, most of them women. They provide a range of services: cleaning, cooking and caring for children, older people and disabled people; they also provide gardening, driving and security services.

    Domestic Workers
  • Home-Based Workers

    Home-based workers produce goods or services in or near their homes for local, national and global markets. There are over 260 million home-based workers in the world, most of them in Asia. They are present in many industries: stitching garments, weaving textiles, assembling micro-electronics, providing IT services and more.

    Home-Based Workers
  • Street Vendors

    Street vendors sell goods and offer services in public spaces, including open-air spaces, transport junctions and construction sites. Market traders work in stalls or built markets on publicly or privately owned land. They offer everything from fresh vegetables, prepared foods, building materials and crafts, to auto repairs and haircuts.

    Street Vendors
  • Waste Pickers

    Waste pickers make a living collecting, sorting, recycling and selling materials that someone else has thrown away. It is estimated that 20 million people worldwide make their living from recycling waste.

    Waste Pickers
  • Garment Workers

    Workers in the garment and textile industry work in various parts of the manufacturing process, often outside of factories. Homeworkers and home-based workers form a significant portion of the garment worker sector.

    Garment Workers

Visit WIEGO's Research Library

Browse over two decades-worth of informal economy research, policy analysis, statistics and documentation of organizing efforts.

Visit the Research Library

GOOD PRACTICESRecent Innovations

Curious how governments have taken action to support workers in informal employment?

Check out Recent Innovations