What is a common outcome of the informal economy for workers?

Workers in the informal economy often experience a lack of benefits, which is a significant outcome of their employment conditions. This sector is characterized by unregulated jobs that do not adhere to formal labor laws, resulting in the absence of protections typically found in formal employment. Consequently, workers in the informal economy commonly do not receive benefits such as health insurance, paid leave, or retirement plans.

Many of these workers may also find themselves in precarious situations without job stability or the security inherent in regulated positions, further emphasizing the lack of support systems that characterize the informal sector. This environment often leads to difficulties in financial planning and can result in vulnerabilities during times of economic downturn or personal crisis, highlighting the challenges faced by those relying on informal employment for their livelihoods.