East Asia Pacific at work : employment, enterprise, and well-being

Uses the overarching term informal economy in reference to market-based production of goods and services that are, in essence, legal under prevailing laws, but concealed to avoid payment of income taxes and social insurance contributions and to escape product and factor market regulation. This definition includes the informal workforce of the self-employed and employers who employ five or fewer workers, workers without a written employment contract, unpaid family workers, and those who do not make social insurance contributions. Informal employment has long concerned policy makers because of the difficulties informal workers and their dependents face regarding health care risks and insurance instruments for managing potentially impoverishing shocks to their income. Large informal economies, where bigger firms are often taxed excessively to make up for revenue lost to the government from widespread evasion, can discourage investment and hinder growth, as well as impose heavy costs that deteriorate services and public goods.