A significant proportion of jobs created in developing countries are precarious, without benefits and protections and can be viewed as being part of a socalled informal economy. This includes employment in the so-called informal sector and informal jobs in the formal sector.
By definition and scope, the informal economy is thus quite heterogeneous in nature and the factors making for its expansion and contraction can be seen to be quite varied. Factors include policies governing business, labour regulation and the provisioning of and access to social security benefits and insurance, as well as the nature of macroeconomic and industrial policies in place. At stake is the overall health of the economy, its growth and its potential to create jobs and entrepreneurial opportunities.
This article comes from the IDS Bulletin 39.2 (2008) Macroeconomic Policies to Address Informality: A Two‐pronged Strategy to Foster Dynamic Transformations that Reduce Informality