Informality and SDGs related to infrastructure

years shorter than in EMDEs with below-median informality. Both the maternal mortality rate and the mortality rate of children under 5 years old in EMDEs with above-median informality were nearly twice the rates in EMDEs with below-median informality. In EMDEs with above-median informality, on average, about 133 deaths per 100,000 persons were caused by household air pollution and ambient pollution, which is significantly higher than in EMDEs with below-median informality by more than 50 deaths per 100,000 persons.

Education. Access to education is less available in EMDEs with more pervasive informality (Docquier, Müller, and Naval 2017). On average in EMDEs with abovemedian informality, people spent less than seven years in schooling, compared with eight to nine years in EMDEs with below-median informality. Less than 85 percent of the population aged 15-24 years in EMDEs with above-median informality is literate— more than 10 percentage points less than the population in EMDEs with below-median informality.

Gender equality. Female workers make up a disproportionate share of workers in the informal sector (Bonnet, Vanek, and Chen 2019; ILO 2018b). In EMDEs with abovemedian employment informality, 87 percent of employed women work in the informal sector, which is about three-quarters higher than in EMDEs with below-median employment informality (table 4D.12). In South Asia (SAR) and Sub-Saharan Africa (SSA), the regions where informality is most pervasive, about 80 percent of female workers in the nonagricultural sector are informally employed (UN Women 2016). In low-income countries, up to 92 percent of all employed women work in the informal sector (ILO 2018b; OECD/ILO 2019). Working in the informal sector exposes female workers to low remuneration, poor working conditions, and lack of or limited access to social protection and rights at work (ILO 2019; Otobe 2017).

EMDEs with more widespread informality are also associated with greater gender inequality in broader terms. The average years of schooling received by women in EMDEs with above-median informality are, on average, 20 percent less than the average years received by men, in stark contrast to EMDEs with below-median informality where no significant gender gap in schooling prevails. Only 55 percent of women in EMDEs with above-median informality have their family planning needs attended to, which is 10 percentage points lower than in EMDEs with below-median informality. In addition to factors such as traditional gender roles, lack of access to education and insufficient coverage of family planning needs constrain women’s ability to participate in the formal sector (Malta et al. 2019).

More widespread informality is associated with poorer access to, and lower overall quality of, infrastructure, with causality running in both directions. Thus widespread informality tends to limit government revenue and hence public expenditure on infrastructure; conversely, poor access to infrastructure can discourage firms or workers from joining the formal sector and engaging with the government (Perry et al. 2007).