informal labour markets

Developing countries have large, complex informal sectors. Informality provides workers and firms with flexibility at the cost of security, often leaving individuals worse off in the long-term. What have we learned from research on informality, and how can we use it to inform policy?

Evidence from Mauritius shows the consequences of losing a formal job in a labour market characterised by high rates of informal employment are significant. Unemployment benefits help mitigate these effects, while generating only small disincentive e...