Informal employment, also known a s the informal sector in labour markets, refers to work that is not regulated by labour laws and social security systems. It includes self-employed individuals and workers in unregistered or unregulated businesses, as well as those who are not covered by minimum wage or protected by labour laws, or those who do not have access to social security benefits.
Informal employment is often characterized by low wages, lack of benefits and job security, and lack of access to training and career development opportunities. Informal workers are also less likely to have access to social security and other public services.
In Turkey, informal employment is a significant issue, with estimates suggesting that around 30% of the workforce is employed in the informal sector. This is higher than the average for OECD member countries, which is estimated to be around 20%. In the agricultural sector in Turkey, informal employment is estimated to be 85% of all the agricultural workers.
The main reasons for high levels of informal employment in Turkey include a lack of job security and a weak social security inspections system, as well as a large informal economy and a lack of enforcement of labour laws.
There are also cultural and historical factors that contribute to high levels of informal employment in Turkey. For example, many people in rural areas have traditionally worked in agriculture or small-scale businesses, which are often informal. Additionally, the informal sector is often a way for people to find work when formal employment opportunities are limited. Younger people coming from poor educational background and low skills are also forced to work informally in their early career.
However, the informal employment also has its severe negative effects, such as low wages, lack of benefits and job security, lack of access to training and career development opportunities, and lack of protection against workplace hazards. Informal workers are also less likely to have access to social security and other public services.
In comparison to Turkey, other OECD member countries have generally lower levels of informal employment, and they have more developed social security systems and stronger enforcement of labor laws. These countries also tend to have more diversified economies, with a larger share of formal sector jobs in sectors such as services and manufacturing.
To combat informal employment, Turkey has been implementing policies such as increasing benefits of tax compliance, strengthening social security system’s inspection scheme, and improving the enforcement of labor laws. Due to this efforts the informal employment rate has declined from over 50% to 30% in the last two decades. However, more efforts needed to be done to decrease the rate of informal employment in Turkey and provide more secure and formal jobs for the workers.
