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State of the Informal Economy in Jordan:Opportunities for integration
Author : Researchers:Dr. Bashar Sobh Mr.Hussein Aburumman
Publisher : AlQuds Center for Political Studies
Book Language : English, العربية
Publication Date : 2019
No. of pages : 72

This paper “State of the Informal Economy in Jordan: Opportunities for Integration” gives a comprehensive understanding of the informal sector in Jordan, as well as an up-to-date measurement of the informal economy and the informal workforce it employs. The informal economy is not a well-studied issue in Jordan, despite its significance in the country. In times of deteriorating economic growth, the informal sector has been important for especially the youth.

By using the currency demand approach the size of the informal economy was estimated to account for nearly a quarter of the gross domestic product. To estimate the size of the informal employment, the study utilized the adapted version of the Labor Force Survey (LFS 2017) from the Department of Statistics, which includes new questions capable of capturing informal employment. The surveys measured the informal workforce by using two indicators: social security registration and the conclusion of written or verbal contracts between workers and employers. According to the answers of the survey, the overall total informal employment in Jordan was estimated to 45,7% in 2017. In 2010 the informal employment was estimated to approximately 44%, which means that there has been a slight increase of informal employment.

In order to give a comprehensive understanding of the informal sector in Jordan, the paper describes the characteristics of the sector, in terms of gender, age, nationality, education, income and other variables.

The researchers held focus groups with experts to discuss the effects of the informal economy on the national economy, what municipalities have done to contain the problems of the informal sector, and what can be done to integrate the informal sector into the formal sector. The researchers also held interviews with a sample of workers in the informal sector to create a panorama of the informal sector in Jordan.  

The conclusions of the paper stress the importance of regulating the informal sector and streamline it as to maximize its returns, and to serve the informal workers and provide them with protection and securities. The recommendations of the policy paper aim to integrate the informal economy into the formal economy, regulate the status of the informal workers, and give rights to the informal workers.