The literature on the informal economy
provides a rich array of approaches which are based on different data sources and methods (a comprehensive survey of methods can be found in Kazemier 2006).
Figure 7 shows the relationship between estimates of the informal economy
by Schneider (2002) and those produced by Model 2.
As is evident, it is a comprehensive scheme that covers all aspects of the informal economy
Independent Democracy of Informal Economy
Association (Idea) director Vorn Pov said the fundamental labour rights of workers had recently been limited through the use of short-term employment contracts and restrictions placed on the right to march to submit petitions, hold demonstrations and strike.
The informal economy
, as the measure defined, refers to the activities by workers and economic units that are not covered by laws or formal arrangements.
Mian Zahid Hussain said that government should also take measures to eliminate child labour in the country in accordance to the conventions of the UNO, which is a major portion of informal economy
. According to ILO 5 million child labour is part of informal economy
in Pakistan who can be part of formal economy if government make proper mechanism for their education and training.
Therefore, without improving human-resources quality, those working in the informal economy
will always be excluded from better job opportunities.
According to Nagaty, the main objective of the establishment of this association is to help integrate the informal economy
into the whole system of the state, noting that this association currently holds extensive meetings with a number of ministries concerned to agree on several axes, the most important of which provide incentives for the informal sector for integration.
Workers in the informal economy
include independent, self-employed, small-scale producers, and distributors of goods and services, who are not covered by labor laws and have no social protection.
There is also a need for stronger labour inspection systems as it rarely reaches workplaces in the informal economy
, where most child labour is found.'
However, several factors could contribute to the proliferation of economic activities outside the umbrella of the law forming what is known as "the informal economy
" or "informal businesses." Those factors could either be related to the validity of the laws in place, the level of corruption or efficiency of the concerned public institution, the environment in which the business is operating or the behavior of the individuals or groups who choose to alienate themselves from the mainstream or resist the designated policy.
A distinction is made between the formal economy, where money is used in exchange, and the informal economy
, where work is carried out without monetary recognition.