Rationale - what it means and why it is an important measure
The increasing role of the informal sector in a number of economies is a consequence of growth in the labor force without a matching response in the level of formal employment opportunities.
How it is compiled, what data are needed
Percentage of the employed population whose activity is part of the informal sector.
Measurements and units
Population employed in informal sector (% per year)
The increasing importance of the informal sector suggests institutional changes for more flexible fiscal policies, better financial credit arrangements for small units of production, and legislation providing limited rights for employees in the sector.
