Informal Employment

Informal employment often associated with the ‘shadow economy’ is a form of employment which escapes taxation and regulation. There are varied definitions of the phenomenon and problems associated with its measurement in society. Understanding the drivers behind the prevalence of informal employment in society is important as it has wide-ranging impacts on society, from reduced social protection for individuals which has implications for inequality and poverty, to the growth of the economy and loss of tax revenue. The informal sector is a pervasive and persistent economic feature of most developing economies, contributing significantly to employment creation, production, and income generation, but also retains a presence in many developed countries.