Working Paper No. 7 - Decent work and the informal economy in Central America

Originally written in Spanish, this paper was translated in English because it discusses the importance of collecting, analyzing, and disseminating statistics on the size, composition, and contribution of the informal economy, using Central America as an example. Obtaining new statistics and indicators such as household surveys are the keys to creating a good diagnosis of the diverse informal economy and appropriate policy suggestions. By showing the informal economy's relation with labour markets and labour force characteristics, the paper attempts to show the decent working conditions existent in this economic sector. Policy makers are concerned with the growing rate of the informal economy, which may indicate a potential lack of advancement to higher levels of accumulation and development. Due to some of the effects of globalization, Central America faces changes that pose a challenge to employment policy in relation to the informal economy, such as the new employment opportunities existing for women. Therefore, the paper suggests to obtain more information to define the informal establishments as specifically as possible. Then, apt policies can be made according to the limitations, problems, and needs for each establishment and ultimately help them develop.