Economic informalization

Economic informalization refers to the process where more economic activities take place outside of official regulations and protections. This can include informal employment, where workers lack formal contracts, benefits, or job security. It often arises in response to high unemployment or stringent regulations, allowing people to seek livelihoods outside the formal economy. While it can offer flexibility and immediate income, it also leaves workers vulnerable to exploitation and lacks social safety nets. Overall, informalization reflects shifts in labor markets and economic policy, impacting both workers' rights and government revenue.