Informal workers in developing countries make up more than half the

workforce They receive low wages and no formal contracts or benefits

yet often represent the most dynamic part of the economy The likely surge of informal jobs due to the economic

crisis makes the management of informal employment even more

challenging and topical Responding to this emerging challenge is critical not only for the well-being of millions

of workers but also for sustainable development Is Informal Normal

provides evidence for policy makers on how to deal with this issue and

promote more and better jobs for all

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DEVELOPMENTHOW TO ORDER

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Normal

Towards More

and Better Jobs

in Developing

Countries

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The 60-second guide

ISBN 978-92-64-05923-8 164 pages Price euro24 $32

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For more informationwwwoecdorgdevpovertyemployment

Contact us at +33 (0) 1 45 24 95 59 devgdooecdorgcopy Fotolia Yali Shi J-f Perigois Ploum1

ISINFORMAL

NORMAL

HOW COMMON IS INFORMAL EMPLOYMENT

Informal work is the norm in low and most middle-income countries and is also sizeable in some high-income economies In several cases the share of jobs performed outside a countryrsquos formal structures may be more than half of all non-agricultural jobs and up to 90 percent if agricultural jobs are included Moreover in places like South Asia and Latin America economic growth over the past 20 years was accompanied by increasing not falling rates of informal employment

Did You Know Out of a global working population of 3 billion nearly two-thirds (18 billion workers) are informally employed

WHAT PROBLEMS ARE ASSOCIATED WITH INFORMAL WORK

Generally informal workers earn less and their basic rights are more vulnerable and difficult to defend Informality can be a major cause of poverty as most informal workers are insufficiently protected from illness or health problems unsafe working conditions and possible loss of earnings due to sudden dismissal This is particularly important for the poor whose labour is their most significant asset Persistently high levels of informal employment also reduce fiscal revenues and the statersquos ability to develop social security systems

Did You Know Over 700 million informal workers live in extreme poverty surviving on less than $125 per day

Formal

Informal

12 Billion40

18 Billion60

Worldwide Informal Employment

Sources OECD Development Centre Is Informal Normal 2009 ILO LABORSTA database ILO Global Employment Trends January 2009

HOW WILL THE CRISIS AFFECT INFORMAL EMPLOYMENT

Past experience suggests that the current economic crisis will lead to rising poverty levels in poor countries as they lack the means to provide comprehensive safety nets The share of informal employment also tends to increase during economic turmoil job losses in the formal sector will lead to a surge in informal employment depressing wages and incomes as the majority of the poor depend exclusively on labour for their survival

Did You Know During Argentinarsquos 1999-2002 economic crisis the countryrsquos economy shrank by almost one-fifth while the share of informal employment expanded from 48 per cent to 52 per cent and urban poverty rose from 2 per cent to 10 per cent

HOW CAN WE DEAL WITH RISING INFORMAL EMPLOYMENT

In the current context of economic crisis immediate and unconventional action is urgently needed to prevent the likely surge in unemployment and insecure poorly paid jobs from increasing poverty around the world While formalization should remain the ultimate objective a comprehensive package of actions should also promote good quality job creation in the informal sector These measures should boost public works micro-credit and conditional transfer programs in order to improve infrastructure skills development institutional reform and access to resources for informal businesses

Did You Know 90 of technical and vocational training in Africa is provided by the informal sector

0

10

20

30

40

50

60

70

80

Sub-SaharanAfrica

South andSoutheast

Asia

LatinAmerica

North Africa West Asia TransitionCountries

Share of Informal Non-AgriculturalEmployment in Developing Countries by Region

Source OECD Development Centre Is Informal Normal 2009 based on data from the latest available period in each region

wwwoecdorgdevpovertyemployment wwwoecdorgdevpovertyemployment

HOW COMMON IS INFORMAL EMPLOYMENT

Informal work is the norm in low and most middle-income countries and is also sizeable in some high-income economies In several cases the share of jobs performed outside a countryrsquos formal structures may be more than half of all non-agricultural jobs and up to 90 percent if agricultural jobs are included Moreover in places like South Asia and Latin America economic growth over the past 20 years was accompanied by increasing not falling rates of informal employment

Did You Know Out of a global working population of 3 billion nearly two-thirds (18 billion workers) are informally employed

WHAT PROBLEMS ARE ASSOCIATED WITH INFORMAL WORK

Generally informal workers earn less and their basic rights are more vulnerable and difficult to defend Informality can be a major cause of poverty as most informal workers are insufficiently protected from illness or health problems unsafe working conditions and possible loss of earnings due to sudden dismissal This is particularly important for the poor whose labour is their most significant asset Persistently high levels of informal employment also reduce fiscal revenues and the statersquos ability to develop social security systems

Did You Know Over 700 million informal workers live in extreme poverty surviving on less than $125 per day

Formal

Informal

12 Billion40

18 Billion60

Worldwide Informal Employment

Sources OECD Development Centre Is Informal Normal 2009 ILO LABORSTA database ILO Global Employment Trends January 2009

HOW WILL THE CRISIS AFFECT INFORMAL EMPLOYMENT

Past experience suggests that the current economic crisis will lead to rising poverty levels in poor countries as they lack the means to provide comprehensive safety nets The share of informal employment also tends to increase during economic turmoil job losses in the formal sector will lead to a surge in informal employment depressing wages and incomes as the majority of the poor depend exclusively on labour for their survival

Did You Know During Argentinarsquos 1999-2002 economic crisis the countryrsquos economy shrank by almost one-fifth while the share of informal employment expanded from 48 per cent to 52 per cent and urban poverty rose from 2 per cent to 10 per cent

HOW CAN WE DEAL WITH RISING INFORMAL EMPLOYMENT

In the current context of economic crisis immediate and unconventional action is urgently needed to prevent the likely surge in unemployment and insecure poorly paid jobs from increasing poverty around the world While formalization should remain the ultimate objective a comprehensive package of actions should also promote good quality job creation in the informal sector These measures should boost public works micro-credit and conditional transfer programs in order to improve infrastructure skills development institutional reform and access to resources for informal businesses

Did You Know 90 of technical and vocational training in Africa is provided by the informal sector

0

10

20

30

40

50

60

70

80

Sub-SaharanAfrica

South andSoutheast

Asia

LatinAmerica

North Africa West Asia TransitionCountries

Share of Informal Non-AgriculturalEmployment in Developing Countries by Region

Source OECD Development Centre Is Informal Normal 2009 based on data from the latest available period in each region

wwwoecdorgdevpovertyemployment wwwoecdorgdevpovertyemployment