We are excited to announce that the Development Economics Global Indicators Group has launched a new initiative to estimate critical metrics related to the informal economy.
Our focus will be on three key areas:
- Informal production, defined as the share of goods and services produced outside formal economic arrangements;
- Informal labor, reflecting the proportion of workers not covered by national labor laws, income taxation, or social protection; and
- Informal businesses, representing the share of enterprises operating without formal licenses or government registration.
This initiative aims to provide valuable insights into the size and evolution of the informal economy, advancing our knowledge on the process of formalization and informing more effective policymaking for private sector development.
Building on the World Bank’s “A Toolkit for Informality Scenario Analysis” and informed by research such as Schneider and Enste’s “Shadow Economies: Size, Causes, and Consequences,” Maloney’s “Informality Revisited,” de Mel, McKenzie, and Woodruff’s “The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka,” La Porta and Shleifer’s “Informality and Development,” and Elgin, Kose, Ohnsorge, and Yu’s “Understanding Informality,” this work will contribute to more targeted and impactful economic strategies.
We look forward to sharing our findings and contributing to informed policy discussions. We will announce the progress on this website.
