Globalization and informal jobs in developing countries

A Joint Study of the International Labour Office and the Secretariat of the World Trade Organization

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This study focuses on the relationship between trade and the growth of the informal economy in developing countries. Based on existing academic literature, complemented with new empirical research by the ILO and the WTO, the study discusses how trade reform affects different aspects of the informal economy. It also examines how high rates of informal employment diminish the scope for developing countries to translate trade openness into sustainable long-term growth.



Varieties of informality

The distinction between formal and informal employment is somewhat fuzzy. Instead of a single, universally accepted concept there are many different and often competing views which are refl ected in a multiplicity of defi nitions. These, in turn, are linked to the plurality of methodologies that are used to quantify informal activities. This chapter presents existing views and defi nitions, as well as an integrated approach which is currently emerging based on the idea of multi-segmented labour markets.


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