COVID-19 Crisis and the Informal Economy

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July 2021
Paper author(s): 
Women in Informal Employment: Globalizing and Organizing (WIEGO)
Macroeconomics - Economic growth - Monetary Policy

Informal employment accounts for over 60 per cent of all global employment, representing roughly two billion workers, and 90 per cent of employment in developing countries (ILO 2018). Early in the COVID-19 crisis, the ILO projected that 1.6 billion informal workers would be among those most severely affected and that they would lose 60 per cent of earnings during the first months of the pandemic.1 The ILO forecasted that this would lead to a sharp growth in relative poverty levels among informal workers from 26 to 59 per cent globally, and a staggering 18 to 74 per cent among informal workers in low-income countries (ILO 2020). In regions that have experienced the worst effects of the pandemic and which have a high prevalence of informal employment, progress in reducing income poverty could be set back by 30 years (Summer et al 2020).


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