Risks and vulnerabilities in the informal economy

1) Informal economy workers face high risks of poverty: Informal workers face more general and
occupational risks than formal economy workers. Their largely unprotected status and inferior working
conditions. In some countries, nearly 42% of informal workers in agriculture sector and 31% of workers
excluding agriculture live in poverty. There is a large wage gap between formal-informal economy
workers, this explains thr higher incidence of poverty among informal economy workers.

2) Absence of adequate risk management instruments: Informal economy workers face high exposure to
risks but lack access to appropriate risk management facilities. Two factors explain their difficulty: their
unorganized status and their exclusion from benefits and regulations from public policy. The absence of
effective policies to manage risks in the informal economy might pass the vulnerability to large segments
of population.

3) Risk and vulnerabilities for informal female workers: In most countries , women are found in most
vulnerable forms of informal employment. For example women need to look after their family, which
effects their employment outcomes. Women in informal economy face a gender pay gap, they are
always paid less than the male workers.