Informal Employment or Decent Pension? Which One is More Desirable?

The informal economy, along with informal employment as its core component, remains a critical issue for policymakers in Azerbaijan.According to the International Labour Organization (ILO), informal economies are often associated with high poverty rates and significant decent work deficits.The formalization of the economy is essential to ensure equitable distribution of opportunities and resources within society.In its 2002 resolution, the ILO defines the informal economy as encompassing all economic activities by workers and units not adequately covered by legal or institutional frameworks.In the literature, the informal economy is also referred to as the shadow, underground, or grey economy.Addressing informality is pivotal for sustainable development and labor market efficiency.