Irregular Migrants in the Informal Economy: Conceptual Issues and its Measurement

This paper provides a framework for discussing the participation of irregular migrants in the informal economy. Conceptual ambiguities surrounding both informality and irregularity have undermined academic and public discussions of this topic. We review alternative approaches to informality and pin down working definitions for the informal (formal) economy, unregistered (registered) firms, and the category of irregular (regular) migrant workers. Furthermore, we present a discussion of pathways into economic informality at the micro- and macro-levels for employers and workers alike. In particular, we elaborate on the additional and unique incentives and constraints that both regular and irregular migrants face in the labor market. We end with a survey of methodological approaches to measuring the size of the informal economy, with the goal of informing the construction of novel methodologies that generate standalone estimates of the participation of irregular migrants in the informal economy.