Empirical analysis reveals informal employment remains high in Kenya and Nigeria, highlighting the effects of formalization policies.
Key Points
Informal employment is notably high, with approximately 81% in Kenya and 92% in Nigeria, indicating significant labor market challenges.
The analysis identifies that higher education and access to formal finance can reduce informality, with Kenya showing slightly better results than Nigeria.
Employing multinomial logistic models, the study utilizes household and enterprise survey data to assess factors associated with informality in both countries.
Kenya's advanced digital infrastructure supports formalization efforts, while Nigeria faces challenges due to low mobile money adoption and incomplete ID coverage.