The social and solidarity economy and the informal economy

Why the informal economy matters

Worldwide, most economic units, jobs and work activities are informal, and the informal economy continues to expand in absolute terms, contributing to persistent decent work deficits, the informalization of formal jobs and formal economic units, and heightened exposure to personal and economic risks, economic insecurity and social exclusion. Those especially vulnerable to the most serious decent work deficits in the informal economy include, but are not limited to, women, young people, migrants, older people, indigenous and tribal peoples, persons living with HIV or affected by HIV or AIDS, persons with disabilities, domestic workers and subsistence farmers.

How the social and solidarity economy contributes

The social and solidarity economy provides democratic, participatory and inclusive pathways to address decent work deficits in the informal economy, transition to the formal economy, and prevent informalization. Organizing into social and solidarity economy entities helps pool resources, reduce economic and personal risks, strengthen representation and improve coverage by formal arrangements. Workers and economic units in such entities can thus achieve scale and a better position in supply chains, enhance access to care, housing, facilities for recreation and culture, finance, markets, nutrition, procurement and social security, and improve working and living conditions. In doing so, they help shift the structural conditions that sustain informality.

What the ILO does

The ILO supports governments and employers’ and workers’ organisations to recognize and promote the role of the social and solidarity economy in addressing decent work deficits in the informal economy, advancing the transition from the informal to the formal economy, preventing informalization, and combatting pseudo-social and solidarity economy entities. By paying special attention to social and solidarity economy workers and economic entities in the design, implementation and monitoring of strategies and measures, governments and employers’ and workers’ organizations can better address the root causes of informality and facilitate the achievement of decent work and universal, adequate, comprehensive and sustainable social protection systems.