Informal Employment in Latin America and the Caribbean: Causes, Consequences and Policy Recommendations

The expansion of the informal sector in the last decades has been accompanied by a lack of almost every form of social protection and low-productivity/low-wage employment. This report summarizes the characteristics of the informal sector and provides policy recommendations to tackle it. Section 2 illustrates the size and trend of the informal sector in the region. It also describes the employment and wage characteristics of informal workers. Sections 3 and 4 review the causes and consequences of informality. Finally, section five concludes and provides policy recommendations.