economic informality

Economic informality refers to activities and workers that operate outside government regulations and official records. These may include small businesses, street vendors, or self-employed individuals who don’t pay taxes or follow formal procedures. They often lack legal protections or access to government services. Informality can arise from complex regulations, high compliance costs, or economic necessity, and it impacts national economies by reducing tax revenue and weakening economic policy effectiveness. While it can provide vital income for many, it also creates challenges in ensuring fair labor conditions and economic stability.