Our international commitment to achieve decent work for all, materialized in the ILO’s Decent Work Agenda and in Goal 8 of the 2030 Agenda for Sustainable Development, is indeed meant to apply to all workers, everywhere. This includes the informal economy, where the decent work deficits are often the greatest. Addressing these deficits requires good, detailed data. In fact, it was precisely to support policymaking that the 21st International Conference of Labour Statisticians (ICLS), after agreeing on new standards for improved measurement of the informal economy, reflected on a set of indicators to cast light on the prevalence of informality, its composition, workers’ and businesses’ exposure to it, and working conditions.
To this day, with almost 58 per cent of all workers worldwide holding informal jobs, informality remains widespread, pervasive, and a major barrier to decent work. Against this backdrop, in this blog we take a deep dive into the informal economy, taking advantage of the wealth of granular data available thanks to improved standards and data collection efforts.
No type of job escapes the risk of informality
The resolution adopted by the 21st ICLS in 2023 defines informal employment as any activity carried out by people to produce goods or provide services for pay or profit that is not covered by formal arrangements such as labour legislation, commercial law, income taxes, and social security regulations (in law or in practice).
Thus, workers can be in informal employment regardless of the type of job they hold and their type of work relationships: informality can be found in all statuses in employment (although it is far more common in some).
According to the 2018 International Classification of Status in Employment, informality manifests for workers in each status in employment as follows:
- Employers and Independent workers without employees – if they own or co-own and operate an informal enterprise (an enteprise that is not registered or does not maintain accounts for tax purposes).
- Dependent contractors – if they are not formally recognized, for instance due to a lack of registration of their activities, or if they are not effectively covered by formal arrangements such as social insurance.
- Employees – if their employment relationship is not formally recognized by the employer in practice, resulting in a lack of effective access to formal arrangements such as statutory social insurance, paid annual leave or paid sick leave.
- Contributing family workers – if their work relationships are not formally recognized or if they do not have effective access to formal arrangements. Until recently, contributing family workers were considered to be in informal employment by default. A new aspect of the standards is to recognize that they can have formal jobs in countries with formal arrangements in place, but these are exceptional.
Drawing on a broader body of data compiled by the ILO, a subset of 20 countries with information aligned to ICSE-18 and the 21st ICLS resolution confirms this pattern: there is informality (to a greater or lesser extent) in all status in employment categories. Contributing family workers are the most exposed to informality, with all of them holding informal jobs in all countries with data but one (Kiribati).
Dependent contractors are also highly likely to be in informal employment: their informality rate reaches 100 per cent in all countries with data but three (Fiji, Kiribati, and Tazania).
To a lesser degree, independent workers without employees are also disproportionately exposed to informality (in three quarters of countries with data, over 95 per cent of them hold informal jobs).
Employee jobs provide by far the strongest protection against the risk of informality, although the risk for employees is still significant in many countries.
Informality permeates households and even the formal sector
Informal employment is one thing (it pertains to the informal nature of the job) and the informal sector is another (it pertains to the informal nature of the economic unit). Informal employment encompasses not only everyone working in the informal sector, but also, everyone holding informal jobs in the formal sector or in households.
Unsurprisingly, the largest share of informal jobs tends to be in the informal sector. However, this is not the case in absolutely all countries with data and for all types of jobs. In fact, data available for 20 countries show that informal jobs can have a very strong presence in the formal sector, going as far as 86 per cent of all informal jobs in the formal sector in Nauru and 76 per cent in Brunei Darussalam.
Since by definition for employers and independent workers without employees the informal nature of their job is linked to the informality of their economic unit, all of their informal jobs are in the informal sector.
Likewise, the vast majority of contributing family workers and dependent contractors holding informal jobs in the 20 countries with data work in the informal sector. For employees, however, it seems much more common to have informal jobs in formal sector businesses (in a quarter of countries with data, over 90 per cent of employee informal jobs are in the formal sector). Employees may also be informally employed by households, working as domestic employees. In some countries, they even account for a significant share of informal employment among employees (over 30 per cent in Lesotho, Laos and Costa Rica).
Informality is ubiquitous: it spans occupations, economic activities, and even the public sector
There is informal employment (to a smaller or larger degree) in all economic activities, all occupations, and even in the public sector.
An ILO Report found that globally, agriculture concentrates a third of informal jobs, although this proportion varies with the level of national income (reaching 62 per cent in low-income countries but only 9 per cent in high-income ones). An additional 14 per cent of informal jobs worldwide are in wholesale and retail trade, 12 per cent in manufacturing, and 11 per cent in construction.
It also found that elementary occupations are the most exposed to informality, followed by craft and related trade occupations, and skilled agricultural, forestry and fishery occupations. Although managers, professionals, and technicians are the least exposed to informality, no occupation fully escapes it.
Occupations being typically associated with certain skill levels and educational attainment, the informality rates by occupation reflect a negative correlation between informality and level of education. As established also in ILO Report The State of Social Justice 2025, our data show that workers with the lowest educational levels are by far the most exposed to informality: in many countries, between 90 and 100 per cent of those with less than basic education are in informal employment. By contrast, informality rates among workers with advanced levels of education are substantially lower, typically ranging between around 10 and 40 per cent. Nonetheless, just as no occupation guarantees formal employment, neither does any level of educational attainment. A non-negligible share of informal workers have advanced levels of education (25 per cent in Brunei Darussalam, and 14 per cent in Zimbabwe).
Unsurprisingly, our data on 20 countries show that informal employment is significantly more prevalent in the private sector (the median informality rate across these countries is 79 per cent in the private sector versus 18 per cent in the public sector). However, this also reveals an important and often overlooked reality: informality is not confined to the private sector. In many countries, a non-negligible share of workers in the public sector are also in informal employment. The public sector informal employment rate ranges from less than 5 per cent in Costa Rica, Palau and Egypt to over 50 per cent in countries Timor-Leste and Cambodia. Sadly, not even having a job in the public sector does not automatically guarantee formal working arrangements.
Informality is associated with broader decent work deficits
The working conditions of people in informal employment reveal how informal jobs are linked to deficits in many aspects of decent work (beyond the ones used to define informality such as lack of social security contributions and lack of access to paid leave).
For example, workers in time-related underemployment (that is, working less hours than they would like to and are available for) are more likely to be in informal employment in most countries with data. In several cases, such as Cambodia, Laos, Malawi and Nigeria, informality among the time-related underemployed reaches extremely high levels, often above 90 per cent. Time-related underemployment often reflects limited access to adequate working hours, irregular work schedules or constrained earning opportunities, characteristics also associated with informal jobs. In this sense, informality is not only about the absence of formal arrangements, but also about the quality and adequacy of employment.
Similarily, in most countries, workers in part-time employment are far more likely to hold informal jobs than those working full time (the median informality rate across countries with data is 85 per cent for part-time workers versus 63 per cent for full-time workers). The gap is often substantial (exceeding 50 percentage points in Costa Rica and Fiji), signalling the precarity of part-time jobs.
When it comes to contract duration, in almost all countries with data, employees with temporary agreements are more likely to be in informal employment, pointing to a clear association between contract instability and informality. Nonetheless, once more, informality is pervasive, and it does not fully spare workers with permanent contracts.
Concluding remarks
Informality is a widespread phenomenon. It is not confined to specific groups or sectors, it is a systemic feature of labour markets worldwide, cutting across statuses in employment, economic activities, occupations, and even groups traditionally associated with formality. The evidence underscores that no worker is entirely shielded from the risk of informal employment, and that it tends to be linked to broader decent work deficits, extending well beyond the lack of labour legislation and social protection coverage. Improved statistical standards and a wealth of granular data available are a solid starting point for targeted policies that can effectively address informality in all its forms.
