informal sector

Meanings

1. 1nounsingularbusinessspecialist

   The part of an economy made up of small, unregistered businesses and workers who are not officially employed or taxed.

   Grammar: Usually takes 'the' and a singular verb; talk about people 'in the informal sector'.

   Patterns

   • the informal sector
   • work in the informal sector
   • the informal sector of the economy

   Many street traders in the city work in the informal sector.

   The informal sector provides jobs for people who cannot find formal employment.

   Government statistics often leave out the informal sector entirely.

2. 2nounsingularbusinessspecialist

   All the unregistered economic activity in a country, considered as a whole.

   Grammar: Used in academic and policy writing, often contrasted with 'the formal sector'.

   Patterns

   • the size of the informal sector
   • the growth of the informal sector

   Economists disagree about the true size of the informal sector.

   Tax reforms may push more activity into the informal sector.

Common combinations

work in the informal sector

She has worked in the informal sector for ten years.

the informal sector of the economy

The informal sector of the economy is hard to measure.

grow rapidly

The informal sector has grown rapidly since the recession.

formal sector

Wages in the formal sector are usually higher.

Synonyms and how they differ

black economy

This suggests illegal or hidden activity, while 'informal sector' is neutral and includes legal small businesses.

shadow economy

More common in journalism and often implies tax evasion; 'informal sector' is the standard academic term.

underground economy

Strongly suggests criminal or secret work, a narrower idea than the informal sector.

Opposites

Word family

informal adjective

Not official or registered; relaxed in style.

informality noun

The state of being informal.

Commonly confused: informal sector or formal sector?

Practice

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Write a sentence using “informal sector”, then check it and compare it with the examples above.

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