Informal employment rate
Information
Full name
Proportion of informal employment in total employment
Short name
Informal employment rate
Code
EmploymentInformalRate
Definition
This series measures the share of informal employment against employment in the total economy.
Employment comprises all persons of working age who, during a short reference period (one week), were engaged in any activity to produce goods or provide services for pay or profit. Informal employment comprises persons who in their main jobs were in one of the following categories:
- Own-account workers, employers and members of producers’ cooperatives employed in their own informal sector enterprises (the characteristics of the enterprise determine the informal nature of their jobs);
- Own-account workers engaged in the production of goods exclusively for own final use by their household (e.g., subsistence farming), if covered in employment;
- Contributing family workers if they work in formal or informal sector enterprises (they usually do not have explicit, written contracts of employment, and are not subject to labour legislation, social security regulations, collective agreements, etc., which determines the informal nature of their jobs);
- Employees holding informal jobs, whether employed by formal sector enterprises, informal sector enterprises, or as paid domestic workers by households (employees are considered to have informal jobs if their employment relationship is, in law or in practice, not subject to national labour legislation, income taxation, social protection or entitlement to certain employment benefits).
An enterprise belongs to the informal sector if it fulfils the three following conditions:
- It is an unincorporated enterprise (it is not constituted as a legal entity separate from its owners, and it is owned and controlled by one or more members of one or more households, and it is not a quasi-corporation: it does not have a complete set of accounts, including balance sheets);
- It is a market enterprise (it sells at least some of the goods or services it produces);
- The enterprise is not registered, or the employees of the enterprise are not registered.
Source: United Nations Statistics Division. Metadata for Sustainable Development Goal indicator 8.3.1: Proportion of informal employment in total employment, by sector and sex. https://unstats.un.org/sdgs/metadata/files/Metadata-08-03-01.pdf (Accessed 29 July 2026).
Rationale
In many forced displacement settings, both displaced populations and host communities face limited access to formal labour markets, weak or fragmented social protection systems, and low coverage of contributory schemes such as pensions and unemployment insurance. As a result, a large share of people secure their livelihoods through informal employment relationships that fall outside labour legislation, income taxation, and social security, and often lack written contracts or enforceable rights. In such contexts, conventional labour market indicators like the unemployment rate provide only a partial picture: they capture whether people are working, but not whether their jobs offer adequate protection, stability, or income. Measuring the share of employment that is informal is therefore essential to understanding the quality and security of work available to refugees, asylum-seekers, internally displaced persons, returnees, stateless persons and host community members.
A data series on informal employment helps to reveal structural barriers to decent work, such as restrictions on the right to work, documentation requirements, discrimination, limited recognition of qualifications, and the prevalence of small unregistered enterprises. It also captures key livelihood strategies, including self-employment, subsistence production and contributing family work, which are common among forcibly displaced populations but often invisible in official statistics. By tracking the incidence of informal employment over time and across groups, this indicator supports evidence-based policies on economic inclusion, social protection extension, and transitions from informal to formal employment, in both humanitarian and development phases and in low-, middle- and high-income host countries alike.
Method of computation
Numerator: number of employed people whose primary main job is classified as informal employment according to the applicable source methodology.
Denominator: total employment.
Calculation: divide informal employment by total employment and multiply the result by 100. Where sector breakdowns are reported, the same calculation is applied separately to agricultural and non-agricultural employment. The SDG metadata specifies that only the characteristics of the main job are used because information on second jobs is usually unavailable.
Comparability
International definition and standards with contextualization
Relationships
| Framework | Indicator | Comparability |
|---|---|---|
| Sustainible Development Goals Indicators | Proportion of informal employment in total employment, by sector and sex | Comparable |
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Limitations
Countries continue to differ in how they operationalize informal employment (e.g. registration thresholds, criteria for informality of employees, coverage of own-use production), which hinders strict international comparability. For SDG global monitoring, this is partly mitigated by relying on harmonized data produced by the International Labour Organization (ILO) using a common processing framework. Nonetheless, residual differences in underlying national concepts, survey instruments and enforcement contexts remain.
Standard labour force or household surveys may under-represent or exclude refugees, asylum-seekers, internally displaced persons or stateless persons, particularly those without formal residence, documentation or in insecure areas. Camp-based populations, people in collective centres, and those in informal settlements or working in highly mobile activities can be missed or only partially covered, leading to underestimation or biased estimates of informality among these groups. Even when displaced persons are included in surveys, they are not always explicitly identified as such, limiting the ability to compute separate indicators for different population groups or to compare them with host communities.
In forced displacement settings, survival strategies often include intermittent, multiple and low–visibility jobs (e.g. daily casual work, unpaid family work, home-based piecework, subsistence activities). These are more likely to be underreported, especially if they are irregular, perceived as “not real work”, or associated with legal or protection risks. This can result in underestimation of both employment and informal employment.
The indicator does not capture persons who are unemployed or outside the labour force due to legal, administrative, social or protection barriers (for example, lack of work authorization, care responsibilities, insecurity or discrimination). In forced displacement contexts, this means the indicator should be interpreted alongside employment, unemployment and inactivity measures to avoid overlooking substantial unmet need for decent work.
Quality assurance
Quality assurance follows the practices of the standardised survey series or data source from which the data is collected.
Data sources
The preferred source is a labour force survey with sufficient questions to determine the informal nature of jobs and whether the establishment where the person works belongs to the formal or informal sector. Other household surveys may be used only when they contain equivalent information.
Panama: Census - 2023
GOVT_PAN_2023_CENSUS
2023
Panama
Census or national survey
Gov't. of Panama
Cameroon: Forced Displacement Survey - 2024
UNHCR_CMR_2024_FDS
2024
Cameroon
Probability survey
United Nations High Commissioner for Refugees, Gov't. of Cameroon
Report is forthcoming.
Pakistan: Forced displacement survey (FDS) - 2024
UNHCR_PAK_2024_FDS
2025
Pakistan
Probability survey
United Nations High Commissioner for Refugees
Zambia: Forced Displacement Survey - 2025
UNHCR_ZMB_2025_FDS
2025
Probability survey
The strata on others of concern (OOC) are former refugeesfrom Angola and Rwanda who have lost their refugee protections, however, remain in Zambia and are at risk of statelessness.