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Economic activity by workers or businesses that is not covered, or is insufficiently covered, by formal arrangements in law or practice.
Save conceptThe informal economy describes economic activity by workers and enterprises that is not covered, or is insufficiently covered, by formal arrangements in law or practice. It concerns how activity relates to institutions and protections. It does not simply mean that a business is small or that a worker has an irregular schedule.
Formal arrangements can provide records and ways to apply workplace protections. Where coverage is incomplete, workers or enterprises may be harder to reach through the usual administrative systems. The exact gap depends on the setting. An analysis needs to identify which arrangements are missing rather than assuming that all informal activities share the same conditions.
Suppose a person regularly works for a business but the arrangement is not recorded through the relevant formal system and lacks protections that normally accompany that work. The person is economically active, even though formal coverage is incomplete. This example illustrates informality; it does not determine the legal classification of an actual Jamaican worker or business.
Informal work remains part of economic activity. It can occur in different sectors, and its relationship to a formal enterprise can vary. Business size, unemployment and informality are separate concepts. Understanding the coverage gap requires information about the work and applicable arrangements, rather than deciding from the appearance of a workplace or the worker’s occupation alone.
US assessment criticises Jamaica’s recruitment enforcement and inspection resources