Formalizing the Informal Sector: a Fundamental Policy for the Economic Stability of the MENA Region

Hamza Saoudi

No 2231, Policy briefs on Economic Trends and Policies from Policy Center for the New South

Abstract: This publication was originally published in the IEMed Mediterranean Yearbook 2022 The informal sector plays a major role in most MENA economies. It employs a large share of the total population and, on average, accounts for about 22% of GDP. According to the International Labour Organization (ILO), which defines informal employment as the proportion of workers without access to social security, the share of informal employment in total employment in MENA countries ranges from 45% in Jordan to 80% in Morocco, with intermediate values of 59% in Tunisia, 63% percent in Egypt, 67% in Iraq and 70% in Syria. In all MENA countries, informal employment is most prevalent in the agricultural sector, followed by industry and the services sector. The prevalence of informality in total employment in the agricultural sector ranges from 69% in Jordan to almost the entire workforce in countries including Yemen, Egypt and Syria. In industry, informal employment ranges from 57% to 83%, and in the services sector, from 38% to 73% (Chart1).

Date: 2022-10
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