What is an informal economy?

The

informal economy can be defined as an economy that works outside a regulated or controlled economy. The informal economy is characterized by various distinguishing factors. For example, this type of economy consists of various types of activities that are not subject to taxation. Another distinctive factor is that the economy is in the sense that it is sometimes a success for those on the labor market that may not be able to qualify for employment in a formal sector because of problems such as a lack of formal stay. Something else that distinguishes the informal economy from the formal economy is the fact that the economy is made up of temporary or migration and extremely small workers who do not have to easily lend themselves and their activities of any form of strict responsibility.

A good example of an informal economy is seen in the country's workers in the country who are not entitled to work in acknowledgingném or formal work sector due to the fact that they are illegal immigrants. This category of workers is sometimes fully qualified by training, experience or education to work in a formal sector, but due to their illegal position they are forced to find work outside the regulated economy. Graduates with illegal documents often find themselves in other countries to exercise laws in countries that exclude people without proper documentation at work. In such cases, they may have an understanding with anyone who employs them, their payment will usually be in cash and are likely to be insufficiently paid in connection with their efforts. Such money obtained by this category of people is not formally charged and will not be included in the gross domestic product calculations (GDP).

Some people may have fully legal status, but their work may be so small that it is not a register on a formal economy radar. An example of this is shoes whose business tools are materialsused for shining shoes. Such a person could go from one street to another or from one city to another when searching for customers. Given that the person earns a negligible amount of money and its migration status makes it difficult to apply the tax laws of any specific state to these activities, income from such efforts, albeit legal, is part of the informal economy.