Informal economy facts for kids
The informal economy is that part of economy which is not reported in official statistics such as the gross domestic product of a country. The informal economy is not taxed, and includes the black market. In developing countries over 70% of the people work in this form of economy. They are self-employed, because it is difficult to find an employer to hire them. People working in this form of economy have no social benefits or social security, which are usually only given by the state to those who have made tax contributions.
Usually, most people working in this form of economy are women; they work in the most erratic and corrupt segments of the job market. Sixty percent of female workers in developing countries are employed by the informal sector. There are two main reasons why this is the case: First, the kind of employment that is available caters mostly to women. Secondly, most women either work from home, because they also have to take care of children, or they work as street vendors; both of these kinds of work are classified in the informal sector.
What is more, most people at the top positions of the sector are men, and most people in the bottom positions are women. For example, very few women are employers who hire others and more women are likely to be involved in smaller scale operations. Labor markets, household decisions, and states all propagate this gender inequality. The gender gap in terms of wage is even higher in the informal sector than the formal sector.
Images for kids
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Black market sellers offer watches for sale to US soldiers in Baghdad in 2004.
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Ice cream street vendor in Mexico.
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Black market peddler on graffiti, Kharkiv
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Daily life of the informal economy in the streets of Bolivia.
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Waste picker in Indonesia
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Street vendor in India
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The Narantuul Market in Ulaanbaatar, Mongolia, colloquially also called Khar Zakh (Black Market)
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German shadow economy 1975–2015, Friedrich Schneider University Linz
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Map of the national shadow economies per capita in EU countries. The red scale represents the numbers displayed by the red bars of the diagram on the left.
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The total national GDP of EU countries, and its formal and informal (shadow economy) component per capita
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Informal beverage vendor in Guatemala City
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See also
In Spanish: Economía informal para niños
