Question

Which of the following statements is correct about the informal sector?

• A. Those who are working in the informal sector enjoy social security benefits
• B. Informal sector includes self-employed who do not have any hired workers
• C. Employs 10 hired workers or more
• D. It includes all the public sector establishments

Answer 1

The Correct Option is B

The informal sector includes self-employed individuals who do not hire workers, and they often lack social security.

Answer 2

The informal sector refers to a segment of the economy that includes self-employed individuals who do not hire workers. This sector is often characterized by small-scale operations, low capital investment, and minimal regulatory oversight. Workers in the informal sector typically operate without formal contracts, making them vulnerable to a lack of job security and benefits.

One key feature of the informal sector is that these workers often lack social security and access to benefits such as healthcare, pensions, and unemployment insurance. Unlike employees in the formal sector, they are not protected by labor laws, which can leave them exposed to economic instability and exploitation.

The informal sector plays a significant role in many economies, especially in developing countries, by providing employment opportunities where formal jobs are scarce. However, the lack of social protection and job security for workers in this sector remains a significant concern. Policymakers are working to address these issues by improving labor rights and providing support to informal workers.