The informal sector refers to economic activities that are not regulated by the government and are not subject to taxation. It includes a wide range of activities, from street vending to moonlighting, and is a global phenomenon that involves about 60% of the world's population
. While some individuals and firms operate informally by choice, the majority of informal workers are in precarious employment due to a lack of opportunities in the formal sector
. Informality is critically related to poverty and inequality, including gender inequality, and countries with large informal sectors tend to grow below their potential
. Policymakers need to focus on implementing policies that help reduce informality while recognizing that it currently represents the only source of income and a critical safety net for millions of people
