This report adds two perspectives on informality. First, it disassembles the mechanics of the deleterious links between informal employment, low-paying work and low skills. It shows that informal employment is highly persistent, and that the vulnerability of informal workers is passed on to their children in the absence of adequate education, skills and social protection policy. Second, the report underscores the double burden of informality and low-paying work that a large share of workers in developing and emerging economies carry, and as such calls for policy solutions that go beyond the formalisation agenda and embrace the goal of social justice.
The topic of informality has been at the heart of the OECD Development Centre’s research and policy work since its creation. Two recent milestones include the 2019 report Tackling Vulnerability in the Informal Economy published jointly with the International Labour Organization (ILO), and the 2023 report Informality and Globalisation: In Search of a New Social Contract. Both reports were based on the OECD Key Indicators of Informality based on Individuals and their Household (KIIbIH) – the OECD Development Centre’s innovative and comparative data on informal employment. These reports have served as a tool to inform actors in various fora at national and international levels, including the Global Partnership for Universal Social Protection (USP2030) and the standard settings at the ILO.
This latest report adds two additional perspectives on informal employment. First, it highlights the inter generational aspect of informal employment and describes the various channels through which the vulnerability challenge of informal workers is being passed on to their children in the absence of adequate education, skills and social protection policy. Second, it underscores the double burden of informality and low-paying work that a large majority of workers in the informal economy carry, and as such calls for policy solutions that go beyond the formalisation agenda and embrace the goal of social justice.
