<P> From the viewpoint of governments, the informal sector can create a vicious cycle . Being unable to collect taxes from the informal sector, the government may be hindered in financing public services, which in turn makes the sector more attractive . Conversely, some governments view informality as a benefit, enabling excess labor to be absorbed, and mitigating unemployment issues . Recognizing that the informal economy can produce significant goods and services, create necessary jobs, and contribute to imports and exports is critical for governments . </P> <P> Women tend to make up the greatest portion of the informal sector, often ending up in the most erratic and corrupt segments of the sector . In developing countries, most of the female non-agricultural labor force is in the informal sector . Major occupations in the informal sector include home - based workers (such as dependent subcontract workers, independent own account producers, and unpaid workers in family businesses) and street vendors, which both are classified in the informal sector . In India, women working in the informal sector often work as ragpickers, domestic workers, coolies, vendors, beauticians, construction laborers, and garment workers . </P> <P> Female representation in the informal sector is attributed to a variety of factors . One such factor is that employment in the informal sector is the source of employment that is most readily available to women . A 2011 study of poverty in Bangladesh noted that cultural norms, religious seclusion, and illiteracy among women in many developing countries, along with a greater commitment to family responsibilities, prevent women from entering the formal sector . </P> <P> According to a 2002 study commissioned by the ILO, the connection between employment in the informal economy and being poor is stronger for women than men . While men tend to be over-represented in the top segment of the informal sector, women overpopulate the bottom segment . Men are more likely to have larger - scale operations and deal in non-perishable items while few women are employers who hire others . Instead, women are more likely to be involved in smaller - scale operations and trade food items . Women are under - represented in higher - income employment positions in the informal economy and over-represented in lower - income statuses . As a result, the gender gap in terms of wage is higher in the informal sector than the formal sector . Labor markets, household decisions, and states all propagate this gender inequality . </P>

Lower paid jobs relative to jobs in the formal economy are considered