As COVID-19 Wreaks Havoc on Service Workers, is the Informal Sector Increasing Global Inequality?

World Bank Group | The Development Podcast

May 24 2021 • 33 mins


Around the world, some 70% of economic activity is taking place in the shadows – and no, we’re not talking about drug smuggling or other illegal commerce.  In this edition of The Development Podcast, the team takes a deep dive into a new analysis that has revealed that the informal sector – firms and workers outside the line of sight of governments in emerging market and developing economies – accounts for about a third of GDP and more than 70 percent of employment.     From Cidade Estrutural – one of the poorest neighborhoods in Brasília, Brazil – we hear from Abadia Teixeira de Jesus, who has spent her life climbing out of the economic shadows and into formal employment – only to be knocked back into informality by COVID-19.    Back in Washington, Raka and Paul speak with Franziska Ohnsorge, the manager of the World Bank’s Prospects Group, about her new book, https://www.worldbank.org/en/research/publication/informal-economy (The Long Shadow of Informality), and what these stunning datapoints mean for the long-term development goals of emerging market and developing economies.   About the Development Podcast:  The World Bank’s Development Podcast takes you on a journey around the world of international development, revealing the latest data, research, and solutions to reduce global poverty and achieve a sustainable future.