The high incidence of informal employment or contractual workers in developing countries suppresses these countries ability to benefit from trade liberalization because contractual employment schemes are poverty traps for workers in job transition and poor productivity in these countries, a joint study by the International Labor Organization (ILO) and the WTO said.

The collaborative study of the ILO International Institute for Labour Studies and the WTO Secretariat seeks to establish linkages between globalization and informal employment.

The study showed that informal employment is widespread in many developing countries, leaving thousands of workers with almost no job security, low incomes and no social protection.

Levels of informality vary substantially across countries, ranging from as low as 30% in some Latin American countries to more than 80% in certain sub-Saharan African and South Asian countries, the study said.

“The study confirms what we know from experience, that by promoting complementarity between decent work objectives and trade, financial and labor market policies, developing countries are much better placed to benefit from trade opening, advance the social dimension of globalization, and to cope with the current crisis,” said ILO Director-General Juan Somavia.