Hidden in Plain Sight: Microeconomic Measurement of the Informal Economy

As documented by the upcoming Brookings paper authored by Social Compact, “Measuring the Informal Economy—One Neighborhood at a Time,” there is a dearth of data and knowledge about the size, determinants, and characteristics of the urban informal economy – in the US and abroad – resulting in an information gap that leads to misinformed policy and investment strategies. Much of the research on urban informal economy, so far, has been done in developing and transitional countries where informal economic activity makes up a large part of the economy. However, there is increasing recognition in the United States by government, the private sector and academia that informal economy is growing in US cities and is often significant.

The Brookings Urban Markets Initiative Collaboratory convened a group of experts from around the world to discuss the current state of the field, explore measurement methods, and develop a research agenda for future work. This was the first in a series of roundtables aimed at understanding informal economic activity in US cities and identifying public and private collaborative agendas to address this information gap.

Additional Resources

	“Measuring the Informal Economy—One Neighborhood at a Time” — by Jamie Alderslade, John Talmage, and Yusef Freeman
	“Shadow Economies of 145 Countries all over the World: What do we really know?” — by Dr. Friedrich Schneider of Johannes Kepler University (PDF-315k)