1. Informality: Exit and Exclusion Comments by Johannes Jütting OECD Development Centre Paris, July 2 nd 2007

2. Main points 1)Rich analysis: Challenging conventional wisdom 2)Policy implications: BAU?! 3)Towards a new research and policy agenda

3. 1) Rich analysis... Very extensive work with systematic evidence Good insights in different rationales of informality – challenging the conventional view Clear distinction between different groups, and how well or ill they are off

4. What do we learn? Development does not lead to a crowding out of the informal sector Informality not always “bad” - can be a voluntary choice Boundaries between formal and informal get blurred Complex reality calls for new models and re-thinking of “old” policy responses

5. Occupational choice is getting complex Individual characteristics and preferences determine choices

6. 2) Policy implications: BAU? (Only) more of the same? Formalizing the informal – but how? How to bring the growth and social policy agendas together? - institutional and governance implications Looking beyond employment  Macro-economic factors – e.g. exchange rate  Agriculture  Gender

7. A closer look into informal employment needed Source: Chen, Vanek & Carr, 2004

8. Understanding better the realities on the ground  Improving statistics and tools to assess labour market conditions; e.g. measuring and identifying informality, measuring vulnerability and mobility  Cross-country work on informal employment and its determinants  Dynamic analysis: formal – informal interaction + dynamics; the within informal employment dynamics 3) Looking forward

9. Societal perspective – good practices to handle trade-offs  Holistic assessment of the impact of informal employment  Formalizing the informal sector? How to do it?  Developing public services and business environment (infrastructure, regulation)  Providing appropriate incentives Critical evaluation of policies and instruments needed  Do they reflect current realities?  Strengths and weaknesses  What is missing? Looking forward