the productive informality definition, no more than 40 percent of wage workers in any sector are considered informal, but, using the legal informality definition, 40 percent to 100 percent of wage workers are considered informal. Yet, across all sectors, the JQM is similar, ranging between 0.75 and 0.95. Furthermore, across multiple sectors in Brazil, Honduras, and Mexico, the share of informal workers is above 90 percent, while the JQM fluctuates from low-quality jobs at around 0.2 in the agriculture and mining sectors in Honduras to 0.88 in the construction sector in Brazil (see figure 8, panel d).

Table 4 shows the distribution of wage workers across the various levels of JQM among the informal and formal workers according to the productive definition of informality. (Annex table A8 provides the same statistics for the legal definition of informality.) The analysis finds that a simple identification of workers as informal can misjudge the quality of their jobs. For example, among 30 percent of wage workers who are classified as informal under the productive definition, approximately one-third have a high level of job quality (a JQM score of 3 or higher), which implies that they fare well on all or almost all dimensions of job quality proposed in this study. Their jobs also score higher than the jobs of nearly one-fifth of formal workers who have JQMs of 2 or lower.

Table 4. Share of Productivity Classified Informal Wage Workers in SEDLAC and JQM

|_Informal_|_Formal_|
|---|---|
|Share of informal workers (30%)|Share of Formal workers (70%)|
|JQM = 0, 3.1%|JQM = 0, 0.3%|
|JQM = 1, 30.3%|JQM = 1, 5.7%|
|JQM = 2, 36.9%|JQM = 2, 12.8%|
|JQM = 3, 20.3%|JQM = 3, 31.2%|
|JQM = 4, 9.4%|JQM = 4, 49.9%|

_Source:_ Estimates based on data of SEDLAC (Socio-Economic Database for Latin America and the Caribbean), Center for Distributive, Labor, and Social Studies, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, La Plata, Argentina, and Equity Lab, Team for Statistical Development, World Bank, Washington, DC, https://www.cedlas.econo.unlp.edu.ar/wp/estadisticas/sedlac/. _Note:_ The table shows the shares of wage workers at different levels of job quality among formal and informal workers, classified according to the productive definition of informality. A worker is informal if the firm employs five or fewer workers.

Correlation analysis between the single dimensions of the JQM and the two definitions of informality (productive and legal) shows that, overall, the JQM is well correlated with the legal classification of informality (−0.7) and less with the productivity classification (−0.5), given that having access to pension benefits is one of the JQM criteria.<sup>23</sup> At the same time, both informality classifications are only weakly correlated with income and the working conditions dimensions (−0.1). The stability dimension is correlated at −0.47 with legal informality and −0.38 with productive informality. The highest correlation occurs between both informality definitions and the benefits dimension with a correlation of −0.86 for

> 23 The correlation is negative because informality is equal to 1, while the lowest job quality score is equal to 0.

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