Informality and Inequality in Africa : exploring the linkages

Abstract

Sustained growth in most countries in Africa in recent years has boosted per capita incomes and reduced poverty, albeit slowly, and led to steady progress in education, health and living standards. But the pace of progress has been slow and hampered by high levels of income inequality within countries. The present report is a synthesis that draws on existing data and research on a range of interrelated themes relating to youth and women’s employment, informality and inequality. It focuses on the large majority of involuntary informal workers to analyze the channels through which informality contributes to inequality in Africa. Given the centrality of the labor market within countries and its far-reaching effects on poverty and inequality, understanding the relationship between informality and inequality is critical for designing suitable policies to reduce inequality by reducing the constraints that trap workers in informal employment.