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Deep Dive · Economics & Policy

Informality and Social Protection

Gig work, the "missing middle", and portable benefits — how informal economies are measured, and how protection can reach the workers who hold them up.

Gig & platform work Portable benefits 14 readings
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ImpactMojo Editorial
Curated by the ImpactMojo team
Informality is the default condition of work in most of the world, and almost the entire condition of work in India. This is the reading list we use to teach how the informal economy is defined and counted, why so few of its workers are protected, and what it would take to build social protection that travels with the worker rather than the job. We're looking for an invited curator — a labour economist or social-protection practitioner — to take it further; pitches welcome.
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Editor's Note

Begin with the scale, because the scale is the argument. The ILO estimates that roughly six in ten workers worldwide earn their living informally; in India the figure is closer to nine in ten. These are not marginal workers waiting to be absorbed into formal jobs — they are the economy. The street vendor, the home-based garment worker, the construction labourer, the auto-rickshaw driver, and now the app-based delivery rider are not exceptions to the labour market; in South Asia they are the labour market. Any social policy that treats formal employment as the norm and informality as a residual category is, by definition, designing for a minority.

India's informality also has a structural shape worth naming: the "missing middle". The country has a vast sea of tiny, unregistered own-account enterprises and a thin layer of large formal firms, with almost nothing in between — no dense band of small and medium firms to graduate workers into formal, protected jobs. Regulation that bites only above a size threshold, and social protection that is tied to a formal employer, both assume a firm-size distribution that India simply does not have. The platform economy adds a new twist: gig workers are formally classified as "independent", yet are algorithmically managed like employees — visible, tracked, and aggregated, but still outside the protections that visibility used to imply.

The policy frontier, then, is portability. If protection cannot be attached to a single employer, can it be attached to the worker — funded by multiple sources, carried across jobs and platforms, and built on a registry rather than a payroll? India's e-Shram database and the gig-worker provisions of the Code on Social Security, 2020 are early, imperfect experiments in exactly this. The sources below move from concept and measurement, through India's specific structure, into platform work, and finally into the design problem of universal, portable social protection.

Section 01

Mapping Informality: Concepts & Scale

How the informal economy is defined, counted, and theorised — the conceptual ground every later debate stands on.

The first set of globally comparable estimates of informal employment, covering over 100 countries. Its headline finding — that around 61% of the world's workforce, some 2 billion people, is informally employed — reframes informality as the global norm rather than the exception. Start here for the numbers everything else argues over.

Section 02

India's Informal Economy & the Missing Middle

Why roughly 90% of Indian workers are informal, and what the country's peculiar firm-size structure means for policy.

Section 03

Platform & Gig Work

The new informality of algorithmically managed "independent" work — and the contested project of bringing it inside the law.

The Indian government's first dedicated study of gig work, estimating 7.7 million gig workers in 2020–21 rising to 23.5 million by 2029–30. Its recommendations — universal coverage under the Code on Social Security, fiscal support, and skilling — set the official agenda; read critically alongside worker-organisation perspectives in Section 04.

The clearest neutral guide to the law that, for the first time in India, defines "gig worker" and "platform worker" and provides for social-security schemes funded partly by aggregators. PRS's analysis flags the gaps too — the schemes remained largely on paper for years, a reminder that legal recognition and actual coverage are different things.

Section 04

Designing Social Protection

From employer-tied benefits to protection that follows the worker — registries, organising, and portable benefits.

India's attempt to make informal workers legible to the state: a self-declaration registry issuing each worker a Universal Account Number, now with hundreds of millions registered and welfare schemes linked to it. A live experiment in registry-based, worker-attached protection — and a test of whether a database can become a delivery channel.

Founded by Ela Bhatt in 1972 and now millions of members strong, SEWA is the living proof that informal workers can organise to build their own social security — insurance, childcare, health, and pensions — when the state and formal unions will not. The indispensable practitioner counterpart to the academic literature above.

The clearest design articulation of portable benefits: accounts tied to the worker rather than the firm, funded from multiple sources, and carried across jobs and platforms. A useful North-American counterpoint that shows the design problem is global, even where the labour markets and welfare states differ sharply from India's.

Suggested citation

ImpactMojo Editorial (2026). "Informality and Social Protection." ImpactMojo Deep Dives. Retrieved from https://impactmojo.in/DeepDives/informality-and-social-protection.html

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