‘A group of household enterprises or unincorporated enterprises owned by households that includes informal own-account enterprises, which may employ contributing family workers and employees on an occasional basis, and enterprises of informal employers, which employ one or more employees on a continuous basis. The enterprise of informal employers must fulfil one or both of the following criteria: size of unit below a specified level of employment, and non-registration of the enterprise or its employees’ (ILO Report of the Fifteenth International Conference of Labour Statisticians, Geneva, 1993).

‘The informal sector plays an important and controversial role. It provides jobs and reduces unemployment and underemployment, but in many cases the jobs are low-paid and the job security is poor. It bolsters entrepreneurial activity, but at the detriment of state regulations compliance, particularly regarding tax and labor regulations. It helps alleviate poverty, but in many cases informal sector jobs are low-paid and the job security is poor’ (GDRC). See also B. Guha-Khasnobis et al. (2000).

http://www.gdrc.org/informal/1-is_concept.html The informal sector.