Most low- and middle-income countries are characterised by a large informal sector, which implies that a substantial fraction of economic activity in these countries is completely unregulated. This has important implications for the behaviour of firms, workers, families, and consumers, with these micro-level consequences of informality potentially combining to have important effects on aggregate outcomes such as productivity, output, and growth. This VoxDevLit summarises a wide range of studies ranging from well-identified empirical analyses to macro and structural equilibrium models of informality. The final goal is to provide an accessible, integrated understanding of the causes and consequences of informality for economic development.

Photo credit: Marcel Crozet / ILO

Presentation of key takeaways

For our launch event, Gabriel Ulyssea joined us to present the key takeaways from this VoxDevLit, highlighting policy relevant results from recent research on the causes and consequences of informality.

Informality Firms Workers Employment Wages VoxDevLit