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Symposium 2010

Solution for Escaping the Informal-Employment Trap in Developing Countries

The Challenge

Informality of employment is a way of life throughout the developing world. In poor Sub-Saharan African countries, the informal sector employs the vast majority of the nonagricultural labour force ...

Informality of employment is a way of life throughout the developing world. In poor Sub-Saharan African countries, the informal sector employs the vast majority of the nonagricultural labour force. Informal jobs continue to account for a high share of employment in the middle-income Latin American countries, The global economic crisis is likely to cause a further surge of informal employment because of job losses in the formal sector.

Where there is wage discrimination, give informal workers a stronger voice and remove the stigma attached to informal employment.

While policies can go a long way towards overcoming widespread informal employment, they are no substitute for measures that more directly contribute to the empowerment of informal workers. Empowerment is particularly important for women, who are over-represented in the informal sector and tend to face wage discrimination and other obstacles, such as laws that prevent them from inheriting assets.

The Self-Employed Women’s Association in India is a notable example of how informal workers might organize themselves, thereby raising their bargaining power over employment conditions and more generally increasing their visibility in society.

    Implemen- tations

    Implementation
    Symposium 2010

    Kenya National Alliance of Street Vendors and Informal Traders

    Polity, Academia, Business, Civil Society

    Related Solutions

    Solution
    Symposium 2010

    Replace tax incentives for firms to invest in physical capital with incentives for firms to invest in human capital via formal employment.

    Replace tax incentives for firms to invest in physical capital with incentives for firms to invest in human capital via formal employment.

    Replace tax incentives for firms to invest in physical capital with incentives for firms to invest in human capital via formal employment.

    Polity, Business, Civil Society
    Solution
    Symposium 2010

    Invest in training and skills development tailored to the needs of the formal sector—which requires market-driven and market- recognized certification of skills.

    Invest in training and skills development tailored to the needs of the formal sector—which requires market-driven and market- recognized certification of skills.

    Invest in training and skills development tailored to the needs of the formal sector—which requires market-driven and market- recognized certification of skills.

    Business
    Solution
    Symposium 2010

    Use new information and telecommunications technologies to formalize employment and support enterprise.

    Use new information and telecommunications technologies to formalize employment and support enterprise.

    Use new information and telecommunications technologies to formalize employment and support enterprise.

    Business, Civil Society
    Solution
    Symposium 2010

    Simplify labor laws and tax legislation without sacrificing basic social standards.

    Simplify labor laws and tax legislation without sacrificing basic social standards.

    Simplify labor laws and tax legislation without sacrificing basic social standards.

    Polity, Business, Civil Society