Informal economy

Over 60 per cent of the world’s workforce and 80 per cent of enterprises operate in the informal economy. Contrary to earlier forecasts, informality is rising in many countries, often accompanied by widespread poverty and severe decent work deficits. Without formalization, achieving decent work for all and social equity remain an illusion. Formalization is a complex, long-term process requiring a combination of legal and regulatory reforms alongside measures to boost productivity and wealth creation. For many workers, reducing decent work deficits is the first step toward progressive formalization.

In 2015, the ILO adopted the Transition from the Informal to the Formal Economy Recommendation, a powerful instrument to advance the Sustainable Development Goals (SDGs). In recent years, an increasing number of countries have introduced strategies and policies to facilitate this transition, while social partners are strengthening their engagement with workers and enterprises in the informal economy.