Understanding Informality : Comprehensive Business-Level Data and Descriptive Findings

This paper introduces and provides a descriptive analysis of data from more than 15,000 detailedinterviews of representative samples of informal businesses operating in 24 cities across seven countries, namely,India, Iraq, the Lao People’s Democratic Republic, Mozambique, Somalia, Zambia, and Zimbabwe. The paper is acompanion paper to a study that presents the methodological underpinnings of the informal business data collection. Itis an innovative application of area-based adaptive cluster sampling, rendering a representative sample of thesebusinesses. The paper presents salient descriptive results of the data to motivate further research. The WorldBank's Enterprise Analysis unit started collecting data from the informal sector using the adaptive cluster samplingmethod in 2017. The combined and standardized data show that informal businesses are small, young, mostly started out ofnecessity rather than as an opportunity for growth, largely detached from the rest of the economy, and with meagerearnings. Few of the informal businesses have ever considered registering formally, with the majorityperceiving no benefits from doing so.