1. Is the current concept of informal economy adequate as a
basis for protecting workers and providing for their needs?
• Characteristics of informal economy
– Labour status
– Size of activity
– Professional status
– Registration of activity
– GNP accounts
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2. Is the current concept of informal economy adequate as a
basis for protecting workers and providing for their needs?
• Growth and development of the informal
economy (Gerxhani, 2004)
– To evade taxes
– To avoid losing government benefits
– To circumvent regulations and licensing
requirements
– A reaction by both firms and individuals to
labour unions
– The impact of international competition
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3. Is the current concept of informal economy adequate as a
basis for protecting workers and providing for their needs?
• Current problems faced in the informal
sector (ILO, 2002 & Becker, 2004)
– Worker rights not present
– Indirect costs
– Force labour
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4. Is the current concept of informal economy adequate as a
basis for protecting workers and providing for their needs?
• Conclusion
– When government policies get complex or costly,
employers/workers sometimes move outside the
official system
– Enterprises in the informal economy have an
entrepreneurial potential that could flourish if certain
obstacles were removed
– Policies are to be implemented to help the
development of the informal sector and help integrate
the two sectors of the economy: formal and informal
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