Possible Improvements
Ways to improve the informal sector include formalizing informal jobs through regulation by the state. The issue with this policy is that so many different types of informality exist. It would be extremely difficult to create solutions to meet so many diverse circumstances. Another possible improvement would be to provide better protections and benefits in the informal sector, but creating protection programs could lead to a disconnect between the labor market and protections, which may not actually improve informal employment. It might also be possible to create other methods of generating income through microloans or land rights when access to the formal sector is limited. This is not a satisfactory solution to effectively combat the issues underlying the informal sector though.
Read more about this topic: Informal Economy
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