Overview
The informal economy is one in which labor conditions do not follow a legal framework. Thus, it includes a series of productive activities where workers do not have rights such as vacations, compensation for working time, severance pay, among others. This kind of economy has a big role in emerging countries. It has been widely agreed that to measure its size is a challenge given unavailability of the data to describe and characterize the issue.
Some efforts have been made to estimate the impact of informal economy in productivity or taxes revenue but it has been less explored its relationship with quality of life of those involved within. This phenomena entitles a social concern regarding the ability of societies to be resilient beyond measuring economic impact.
Definition
Informal economy effects on quality of life measured by GEIH dimensions. Longitudinal study (2019-2021) of Barranquilla, Bogotá, Bucaramanga, Cali, Cartagena and Medellín Metropolitan Areas.
Relevancy
Given that the economy does not have sufficient capacity to integrate the growing workforce, there is a significant proportion of these people who move to the self-employment generation or underpaid jobs with no formal vinculation, where working conditions are usually poor, there is exclusion from the social security system, insufficient income, among others.
For those reasons, measuring the size of informality is key to understand the common struggles of the less favored population as well as being able to identify the demographic groups within this sector in order to predict vulnerabilities and common tendencies among cohorts or clusters. Therefore providing relevant information on the matter that can be used to mitigate this phenomenon and to uncover negative impacts on quality of life of the broader population allowing a better decisión making process by policy makers.
