INFORMAL ECONOMY AND VULNERABLE GROUPS

When we talk about vulnerable groups we refer to those people who find it hard to enter the labour market and who suffer from some sort of discrimination and are more exposed to the ups and downs of the labour market. The fact of being a woman, a young person, having some kind of disability or belonging to certain ethnic groups can be a limitation to participation in the labour market.

This can be clearly observed when we analyse the indicators of the labour world. If we look into the employment, unemployment and underemployment rates, and more specifically the categories of informal employment (freelance workers excluding professionals, micro entrepreneurs, microenterprise workers, homeworkers, etc.), we can see that there are groups of people that encounter more difficulties and limitations when it comes to enter the labour market in quality job posts, with a fair salary, social security, etc.

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Furthermore, if these indicators are analysed by sex, we can visibly notice that women are the most affected by these factors. They have higher unemployment and underemployment rates and more participation inside informal economy. According to a recent study developed by ILO 1, half of the employed population (50.1 percent) in 2003 worked in the informal economy. The proportion of informal occupations in the total of women employment is higher than that of men.

This shows that women are over-represented in informal economy in the region. To this we can add the fact that women access less quality jobs within informal economy compared to men. Their income is lower, they are less protected by social security and they usually work in precarious sectors such as domestic service and non-paid homework.

With the growth of informal activities, there has been a rise in the number of child workers. This affects all economic sectors and can be closely related to the production of the structured sector. Child labour dimensions in the informal economy, which usually remain out of reach for most official institutions, in countries with all levels of income, are one of the main problems interfering with its effective eradication.

Although there are security networks in the informal sector, they are not really appropriate and less reliable in urban areas than in rural ones. Under these circumstances, the risk of forcing children to carry out income-generating tasks is evident.
Another inequality and social exclusion situation appears when we compare labour indicators according to age group. We can then conclude that both young people and older adults suffer from higher unemployment and underemployment rates. Besides, they are mostly employed in low productivity and poorly paid jobs, hardly ever covered by social security.

The same conclusions can be drawn if we focus on ethnic groups and people with some kind of disability or disease.

Due to the labour insertion problems these groups face, they are usually immersed in poverty, thus creating a vicious circle between informal economy and poverty. Breaking this circle and reversing these trends does not only require the economic growth of our countries but it should also be accompanied by macroeconomic policies of employment and education.

This is why this sub site offers a list of documents and publications that expose the situation of these vulnerable groups in the countries of the region. It also includes a review of the programmes, policies and successful experiences that have addressed these issues and can serve as a guide to the future action-taking of countries.

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1-Laís Abramo and María Elena Valenzuela, in International Labour Review, special issue on "Labour integration of women", vol. 144, No. 4, International Labour Office, Geneva 2005.