Informal Economy Monitoring Study

Why the Informal Economy Monitoring Study?

In cities across the world today, many or most people work in the informal economy. The majority are poor, and do not choose informality as a way to hide from regulations, but out of necessity. As the 2008 global economic crisis revealed, these workers have no cushion to fall back on. Their income is critical to their households.

Informal work is also critical to city life. Informal workers make real and tangible contributions. They pay some form of tax. They provide crucial services to communities by providing affordable goods at convenient locations, by producing goods for the local and global market, and by subsidizing solid waste management plans through recycling. They buy from, and sell to, formal firms.

Given the size and contributions of the informal work force, policymakers and planners must ask how to better integrate informal employment into urban plans. How can cities be more inclusive and, ultimately, productive?

Inclusive Cities’ flagship research project, the Informal Economy Monitoring Study (IEMS), provides credible, grounded research on informal employment to answer these questions. It focuses on three sector groups: home-based workers, street vendors, and waste pickers.

What Makes the IEMS Innovative?

How was this study able to ask better questions, gather more reliable data, and interpret the data with deep, longstanding knowledge of informal workers across 10 cities?

  • It was conceptualized, designed, and implemented in partnership with informal workers’ organizations (link to page with partners, logos, and links where applicable).
  • It was based on a participatory methodology that enabled workers to articulate the key drivers of their working conditions in their own words.
  • It combined world-class technical expertise with in-depth local knowledge to probe themes relevant to each worker group


What Are the Key Findings?

The research showed that:

  • Informal workers’ activities are linked to – and in fact sustain – the activities of formal enterprises.
  • Informal workers’ households depend on the earnings they generate through informal work.
  • Informal workers’ livelihoods are negatively affected by a variety of city government policies and practices.


What Should Urban Policymakers and Planners Do?

The study found that informal workers could make greater contributions to thriving cities and strong economies if urban policies and practices supported their work. It recommends that governments:

  • Provide low-income housing better suited to income generation.
  • Ensure zoning that allows mixed residential and business use.
  • Establish a fair and transparent regulatory environment.
  • Integrate informal workers into city-wide plans and provide appropriate work infrastructure to all three groups.
  • Recognize the role that urban infrastructure plays in supporting livelihoods at the base of the economic pyramid.
  • Ensure informal workers are full participants in urban planning and policymaking.

Read the more detailed findings on each city and sector by clicking on the links below.

Sector Reports


Home-Based Work

Street Vendors

Waste Picking (forthcoming)

See All Sector Reports