Economic Contribution of the Informal Economy

The contribution of economic activities in the informal sector to total Gross Domestic Product (GDP) or Gross Value Added (GVA) provides a key indicator for measuring not only the performance of the informal economy but also the economy as a whole.

Estimates of the contribution of the informal sector to the GVA have been made for about 30 countries in the International Labour Organization/WIEGO publication Women and Men in the Informal Economy 2nd Edition, 2013 (page 22).

  • The contribution is the highest in the countries of West Africa. For example, in Benin, Niger and Togo, the informal sector, excluding agriculture, accounts for more than 50 per cent of non-agricultural GVA.
  • In India, the contribution of the informal sector to the economy is 46 per cent of non-agricultural GVA in 2008.
  • In Guatemala and Colombia, it is over 30 per cent of non-agricultural GVA.

Recently, Mexico estimated the contribution of total informal employmentboth inside and outside the informal sector—to the national economy. In July 2014, the National Institute of Statistics and Geography (INEGI) made available the first estimates of the Informal economy in the Mexico GDP for the years 2003-2012. During the period, the share of the GDP contributed by the informal economy dropped slightly from around 27 per cent to a still significant 25 per cent. Read more.