In developing economies, the informal sector can account for upwards of 60% of GDP and over 90% of employment. The data show wide disparity in informal economy size by geographical region and income group. Countries in South Asia, Latin America and Africa show on average around a 20-percentage point larger share of informality in GDP than middle-income countries and a 40-percentage point larger share of informality in GDP than high-income countries. Disparities in informal employment by gender, with most countries showing higher shares of informal employment for women as compared to men point to the need to study the impact of the informal economy on development through a gender lens.
This is a revised version. The previous version was dated March 2023.