The World, Explained · 45 sec
Informal economy
A small piece of context that makes the wider world easier to read.
The useful idea
- The useful idea
An informal economy (informal sector or grey economy) is the part of any economy that is neither taxed nor monitored by any form of government.
- How it works
Although the informal sector makes up a significant portion of the economies in developing countries, it is sometimes stigmatized as troublesome and unmanageable.
- Why it matters
However, the informal sector provides critical economic opportunities for the poor and has been expanding rapidly since the 1960s.
Why this matters
Use Informal economy as context when interpreting events and claims about the world.
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Use Informal economy as context when interpreting events and claims about the world.
Test your recall
Which idea belongs to the explanation of Informal economy?
- Why it matters
- How it works
- The useful idea — correct
An informal economy (informal sector or grey economy) is the part of any economy that is neither taxed nor monitored by any form of government.