What is the informal economy?
Q: What is the informal economy?
A: The informal economy is an economic system that is not reported in official statistics such as the gross domestic product of a country. It includes activities like the black market and self-employment, and it is not taxed.
Q: How prevalent is the informal economy in developing countries?
A: In developing countries, over 70% of people work in this form of economy.
Q: What benefits do people working in the informal economy usually have access to?
A: People working in this form of economy typically do not have access to social benefits or social security, which are usually only given by the state to those who have made tax contributions.
Q: Who makes up most of the workforce in this sector?
A: Most people working in this form of economy are women; they work in some of the most erratic and corrupt segments of the job market. Sixty percent of female workers in developing countries are employed by the informal sector.
Q: Why does gender inequality exist within this sector?
A: Gender inequality exists within this sector because labor markets, household decisions, and states all propagate it. The kind of employment available caters mostly to women, many women work from home or as street vendors (which are classified as part of the informal sector), and most people at top positions are men while most at bottom positions are women. This results in a higher wage gap between genders than what exists within formal sectors.
Q: Are there any solutions for reducing gender inequality within this sector?
A: Solutions for reducing gender inequality could include providing better educational opportunities for women so they can gain skills necessary for more high-level roles within these sectors, creating policies that promote equal pay between genders regardless if they're employed formally or informally, and encouraging employers to hire more qualified female candidates instead of relying on stereotypes about their capabilities or qualifications.
