ILR School

The Informal Economy and Decent Work: A Policy Resource Guide Supporting Transitions to Formality

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Some forty years after the initiation of the concept of “informal sector”, informality represents a contemporary challenge for policy makers and labour market analysts. Informal employment characterizes half of the global labour force and is strongly associated with decent work deficits, quality of jobs, working poverty, low productivity, discrimination and exclusion, insecurity and vulnerabilities in the labour market. As the impacts of the global financial and economic crises, cut deep into communities around the world, and as ordinary women and men face greater insecurity and rising unemployment and inequality, it is evident that our attention must be drawn to addressing informality in all its forms and everywhere with renewed vigor. The destabilizing effects of informality go beyond the individuals and affect enterprises, state revenues and the adequate functioning of labour market insti- tutions and policies. In our objective to support member States and social partners to promote the transition to formality the ILO starts from a good point. We have gained a wealth of policy experience and evidence from country practices and research. We are also better capturing the phenomenon through improved data collection. Most importantly we have an historic tripartite consensus around a framework – gar- nered in the 2002 International Labour Conference Resolution – on the best ways to address informality in a comprehensive manner and anchored in the Decent Work Agenda. Since the adoption of that Resolution, we have seen continued strong demand for ILO support to its member states in reaching out to the informal economy in various technical fields. This practical Policy Resource Guide, initiated and completed by the Employment Policy Department, is the first initiative to bring together in one volume, a synthesis of knowledge, policy innovations and good practices facilitating transition to formality highlighting the multiple pathways and the indispensable synergies and coherence amongst the objectives of employment promotion, social protection and upholding rights.

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decent work; informal economy; social protection; labor rights


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