Informal is the new normal: improving the lives of workers at risk of being left behind

Working and discussion papers
January 2018

The adoption of the Sustainable Development Goals (SDGs) has given a new urgency to efforts to confront deficits in employment. We take up the call to improve the working conditions of informal workers who face being left behind given that processes of formalisation are unlikely to incorporate them in the near term in many countries. Indeed, there is evidence that levels of informal employment are increasing. We stress the heterogeneity of the informal workforce in terms of, firstly, different types of workers (e.g. contributing family workers, homeworkers, informal wage workers and own-account workers) and, secondly, patterns of vulnerability, highlighting gender.

Key messages:

  • Informality remains a pervasive challenge. On average, 7 in 10 non-farm workers in countries in sub-Saharan Africa and Southern and South-East Asia are in the informal economy, and the scale of the challenge has been increasing in many regions.
  • Many workers in the informal economy are in a highly precarious economic situation. Women are disproportionately ‘at the bottom of the pyramid’ and face the biggest challenges.
  • Because processes of formalisation are unlikely to absorb the informal workforce in the near term, we call for policy measures which will reach informal workers.
  • Policies to target self-employed workers could include promoting access to capital and technology, supporting cross-border trade and improving infrastructure in the workplace, including for home-based workers.
  • To target wage workers, we highlight a minimum wage policy that has benefited those working informally.
  • Under universal policies, we argue for pensions and health coverage, support for worker organisation and skills upgrading.