The paper finds that urban informality is large and persistent in SSA. We estimate that 56 to 65 percent of the urban labor force can be classified as working in the informal sector, rising to 70-76 percent if we omit Nigeria and South Africa from the sample. Half of those are low-educated self-employed, which we equate with the informal self-employed. Another third are wage employees who do not receive social benefits as a part of their remuneration package. The balance are unpaid (mostly family) workers. These estimates are similar orders of magnitude as those in ILO (2018). Back of the envelop calculations for a subset of countries suggest that the share of urban informal employment can fluctuate significantly in the shortrun, with expansion in some countries and contraction in others. The negative correlation between the share of urban informal workers and GDP growth rates suggests that economic growth may bring formalization in the long-run, with significant noise in the short run. Despite the strong correlation, the direction of causality is not necessarily obvious.

These regional averages mask significant heterogeneity across countries. While most countries follow the regional trends, orders of magnitude may differ significantly. For example, the share of the urban labor force that can be classified as informally employed ranges from 20 percent of South Africa’s labor force to 92 percent in Benin. The biggest share of informal sector employment in most countries is in LE-SE, ranging from 24-45 percent. Thus, no single country profile can be a proxy for the region and regional proxies can only approximate country-specific profiles.

Urban informal employment can be characterized as prime-aged workers with incomplete secondary education, slightly more female, non-poor, and working in middleskilled jobs in the service sector. The informal sector is more heavily female than the formal sector, largely due to female under-representation in the latter as women crowd into selfemployment and unpaid labor. It is younger, particularly in unpaid jobs. Informal sector employees have less education, principally due to an absence of tertiary workers, though all other education levels are found in the informal sector. It is more comprised of middleskilled workers while the formal sector is balanced between middle- and high-skilled. While informal sector workers are poorer than formal sector workers, the difference in average poverty rates is only 8 percentage points.

Sub-profiles emerge within the informal sector, principally driven by life-cycle and gender. Unpaid workers are those who are least connected to the labor force, being young, female spouses, low-skilled and over-represented in the low-skilled agriculture sector. Prime-aged women dominate informal self-employment while prime-aged men dominate informal wage employment. While both informal employment types are characterized by middle-skilled occupations in the service sector, informal wage employees are less poor and more engaged in high-skilled and “other sector” jobs. From the perspective of welfare, highly-vulnerable workers look the same as low-vulnerable workers in terms of demographics, but the latter are more in services and in medium- and high-skilled occupations.

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