The Informal Economy as a Path to Expanding Opportunities

Abstract

The informal economy a help or a hindrance to expanding the opportunities of the poor? Conventionally, it has been deemed a hindrance; an unproductive sphere that is deleterious to wider economic development and growth. Recently, however, a more positive depiction has emerged viewing it as a useful means of expanding the opportunities of the poor. This report reviews the arguments and evidence for viewing it more positively and how it might be harnessed in order to help expand the opportunities of the poor.

Keywords: development economics, development studies, informal economy, informal sector, economic development, informal labor markets

JEL Classification: H26, J48, J46, K34, K42, O17