The informal sector represents an important part of the economy and the labor market in many countries, especially developing countries. Measurements of the informal sector are of intrinsic interest in their own right and contribute toward exhaustive measures of gross domestic product (GDP)....

Informal firms make up a major share of the economy in most developing countries. Expanding formalization could increase government tax revenues, boost firm profits and national income, and increase employee well-being by improving access to social security and health and workers' benefits....