Informal Labour and Credit Markets: A Survey.

Figure 1: The Size of the Informal Economy around the World Schneider (2005)
countries. The estimate is likely to increase if we include the agricultural sector and
other Asian countries in addition to India. Schneider (2005), using a combination of the
DYMIMIC and currency-demand approach, reports results for 110 countries and reports
data . The estimates show that the informal sector has increased considerably in African
countries, but also in other developing economies. Upward trends are also found for tran-
sitional and developed economies.¹⁰

The increase in informality is partially confirmed in Perry et al. (2007) for a subset of
countries. The general trend of informality for Latin American and the Caribbean suggests
an increase over time even if differences exist between informal salaried and self-employed
(Figure 1.9 of the report). See Table 3. A similar trend is confirmed in ILO (2002) ¹¹
Rei and Battacharya (2008) points out how data availability on informal employment is
usually available for a limited set of countries, compared to the wider estimates of the
informal economy provided in Schneider (2005). Also Box 1.3 in Perry et al. (2007) shows
that when official statistics are available they may conflict with unofficial measurement of
informality as in Schneider (2005).

¹⁰See Table 3.

¹¹See Henley et al. (2006) for a discussion on the range of empirical definitions of informality employed
in the literature

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