Informal Economy and Gender Equality

Empowering African women to break out of informality

Promoting women’s empowerment as one way to facilitate transition from the informal to the formal economy and address a major development challenge worldwide.

Press release | ADDIS ABABA | 16 September 2014
NAIROBI (ILO News) – Breaking out of the trap of informality and poverty requires a policy environment that organizes informal economy workers and promotes equality for women and men in the world of work, the Organization of African Trade Unions Unity (OATUU) Women Conference in Nairobi, Kenya highlighted today.

“We all recognize that as women, workers are often marginalized and highly vulnerable to discrimination and exploitation. The trade unions have a critical role to play to organize women workers and represent and protect their interests”, the ILO Assistant Director-General and Regional Director for Africa, Aeneas Chapinga Chuma said.

Gender inequality is more prevalent in the informal economy, where women are concentrated in the lower-quality jobs, Chuma underlined while ”within the informal economy, women make a sizeable contribution to GDP, either as independent entrepreneurs or in employment relationships in global production chains or small businesses”.

The ILO figures clearly indicate that the informal economy is a significant employment provider. It takes up a significant share of non-agricultural employment which varied from 32.7% in South Africa to 76.2% in Tanzania.

According to the ILO, women tend to be affected more by informality than men. Globally, the share of informal non-farm employment for women in Brazil is 6.7 percentage points higher than men; this gender gap is up to 7.0 percentage points in Mexico and South Africa.

Diverse economic, social and cultural factors are observed to negatively affect women’s access to formal employment. On average, women are especially vulnerable to informal employment and often have a higher share in the most disadvantaged and marginalized segments of the informal economy.

Transition to formality - Strategies

In many countries, the special services provided by trade unions for informal economy workers include information on their legal rights, educational and advocacy projects, legal aid, medical insurance, credit and loan schemes and the establishment of cooperatives.

“There is also a need to develop positive strategies to combat all forms of discrimination, to which informal economy workers are particularly vulnerable”, The ILO head for Africa underscored.

According to Mr Chuma, “a coherent, gender-sensitive, national strategy to facilitate transition to formality needs to recognize that the costs of working informally are high for businesses, workers and the community”.

In facilitating transition to formality, some G20 countries adopted measures to bring certain previously uncovered categories of workers under the umbrella of social security legislation. For example, South Africa included domestic workers under its Unemployment Insurance Fund in 2003. As a result, as of 2013, the 654,000 insured domestic workers, most of them women, enjoy greater income security in case of maternity or unemployment.

The ILO studies argue that the success of policies to increase labour force participation of women and youth are also contingent upon effective strategies to improve the quality of their employment.

The 103rd Session of the International Labour Conference in June 2014 would bring together around 4,000 representatives of the world of work to pursue discussions towards an international instrument, an ILO Recommendation, as a framework for action to facilitate the transition from the informal economy to the formal economy. The proposed instrument gives special attention to gender equality in order to promote equal opportunities for women and men.