10 May 2018
ILO Report: Two Billion People Engaged in Informal Economy
UN Photo/John Isaac
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On International Workers Day, ILO released a report on the state of the informal economy, with comparable data from over 100 countries.

According to ILO, measuring the informal economy is a key first step in achieving SDG 8 (decent work and economic growth), particularly its indicator on the proportion of the population engaged in informal employment.

1 May 2018: The UN International Labour Organization (ILO) released a report finding that over two billion people globally earn their living in the informal economy. ILO released the report on International Workers Day, observed annually on 1 May.

The report titled, ‘Women and men in the informal economy: A statistical picture,’ finds that 61% of the world’s employed population works in the informal economy. The majority of these lack decent working conditions, rights at work or social protection. The report underscores the relationship between the informal economy and poverty, explaining that poverty rates are higher among informal workers.

Measuring the size of the informal economy is “an excellent step towards acting on it.”

Rafael Diez de Medina, ILO, underscored the importance of measuring the number of people engaged in the informal economy in progress on the SDGs. SDG target 8.3 aims to “promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services,” while SDG indicator 8.3.1 measures the proportion of informal employment in non-agricultural employment, by sex. Diez de Medina emphasized that measuring the size of the informal economy is “an excellent step towards acting on it,” in part because the report presents comparable data on the state of the informal economy from over 100 countries.

The report identifies education as a key factor affecting informal employment, finding that the level of informality decreases as education levels increase. People living in rural areas are nearly twice as likely to be engaged in informal employment compared to those in urban areas. When agriculture is excluded, half of the employed population works in informal employment.

The report highlights geographic variation in the informal economy, with 93% of the world’s informal employment occurring in emerging and developing countries. In Africa, informal employment makes up 85.8% of all employment. In Asia and the Pacific, 68.2% of employment is informal. In the Arab States, 68.6% of employment is informal. In Europe and Central Asia, 25.1% is informal. The report also finds that 63% of men are engaged in informal employment, compared to 58% women. [UN press release] [ILO press release] [Publication: Women and men in the informal economy] [UN Secretary-General’s statement on International Workers Day]

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