Informality and Globalisation
In Search of a New Social Contract
Globalisation and rapid technological change have radically transformed labour markets, affecting the lives and prospects of billions of workers. Those in the informal economy, the vast bulk of the workforce in the Global South, have been bearing the brunt. This report is for policy makers seeking to address the factors that make those workers in informality vulnerable. It provides them with a distinctive cross-country comparison of recent informality trends, and how they were affected by the recent crises such as the COVID-19 epidemic, casting light on the impacts of sub-contracting models in global value chains, and digital labour platforms. It argues that an inclusive recovery and greater resilience to future crises necessitate that many countries renew their social contracts, to make them more inclusive of informal workers and their families.
Portraits of informality
This chapter presents the informality profile of people across countries and regions in 2019 on a global basis and for selected countries, as well as the latest trends covering the COVID‑19 pandemic period. It relies on International Labour Organization (ILO) individual-based data on informal employment for 147 developing, emerging and developed economies, and the Organisation for Economic Co-operation and Development’s (OECD) Key Indicators of Informality based on Individuals and their Household (KIIbIH) database, available for 43 developing and emerging economies. Both refer to the ILO’s definition of informal employment. The resulting comprehensive portrait of informally employed individuals and their dependents shows distinct patterns that policy makers must take into account in order to effectively tackle the challenge of vulnerability in the informal economy.
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