Effect of Informality on Economic Growth

According to INEI (Instituto Nacional de Estadística e Informática) Informal employment concerns approximately three out of every four Peruvians of the economically active occupied population (employed population). The graph shows that the percentage of informal jobs was 72.7% in the year 2019, representing 56.9% of the EAP (economically active population).

As indicated, three out of every four workers in the employed population have informal employment. The graph presents informal employment by company size, it is observed that the largest proportion of informal employment is found in companies of smaller relative size; In contrast, “formal” employment is concentrated in the largest companies. 63% of the employed population with “formal” employment works in companies with 31 or more people, while 82% of the employed population with informal employment does in companies with 5 or fewer employed people.

Over the years we have been able to see how informality has been increasing, but all this is due to the needs of people, especially these last two years, in which they have been a pandemic, we have been able to see that businesses from home have become more common and that businesses start from scratch in any area, which has been able to make the legalization of your business, which is why we decided to base ourselves on the statistics and take a closer look at how informality has evolved.

Norman Loaiza. (2007, noviembre). The Causes and Conequences of Informality in Peru (N.^o 2007–018). The World Bank. https://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2007/Working-Paper-18-2007.pdf