Education, skills and training for people working in the informal economy

It has been estimated that about 2 billion people across the world are engaged in the informal economy, often relying on self-employment, casual work and family-based enterprises for their livelihoods. This workforce plays a crucial role in providing goods and services, particularly in low- and middle-income countries, yet limited systematic research has theorized this group’s access to education, skills training and social protections. Accordingly, this review of the evidence on skills development in the sector, which draws on research undertaken across the Global South from 1970 to the present, sought to identify who works in the informal economy; the practices that characterise their work; and the kinds of educational resources they can access. The review found that the characterisation of the sector as a dumping ground for uneducated, unskilled workers who cannot participate in the formal sector, which was proposed by a 1972 International Labour Organisation report, represents a crude, dualistic account that fails to capture the reality on the ground. Rebutting this simplistic view, scholars have noted the heterogenous character of the informal economy, which comprises both entry-level and more established upper-tier businesses; the porous nature of the boundary between the formal and informal sectors, with entrepreneurs working across and engaging with both parts of the economy; and the ways in which both formal skills development and the informal acquisition of skills, such as through apprenticeships, family enterprises and social networks, can add value for workers and businesses.