Informal Employment: Two Contested Policy Issues

This article addresses two contested issues of crucial importance to policy, namely: formal labour regulations as a cause of informal employment, and so-called "volutnary" informal employment. The authors provide theoretical overviews on both issues and an extensive survey of empirical studies on the effects of formal labor regulations on informal employment. This article closes with observations on the relevance of the ILO's four decent work objectives for informal employment and economic development, with particular emphasis on the significance of--and potential for--organizing workers in the informal economy.