In South Africa, the informal economy is estimated at 16 to 40 percent of gross domestic product. The majority of those surveyed in the township of Khayelitsha began their own business out of necessity, as they were unemployed or in need of additional income. In addition, almost half of businesses in the sample had created employment for at least one nonfamily member. Of the 30,000 informal businesses assessed in Dakar, Senegal, each employed, on average, just under one additional worker. Most homework tasks involve simple, unskilled, labor-intensive tasks that require little capital and few tools.
Work is unstable and offers no security.
Yet, there are a variety of reasons that homework and other employment continue in the informal economy despite these hardships, among which is the fact that often no jobs are available in the formal economy. Zimbabwe has approximately 200,000 new entrants to the job market each year. Some of them are absorbed by small and medium-sized companies, but the rate of absorption is too low to change unemployment figures. In many countries, most businesses in the informal economy are illegal under existing laws. Some experts contend that the businesses, along with illegal micro-enterprises, within developing countries may be the only possible source of income for most people in large cities.