The scale, sectors, and policy dimensions of informal employment in Georgia — covering approximately 37% of all workers. Data from Geostat Labour Force Survey and ILOSTAT. Updated quarterly.
| Indicator / Segment | Value | Notes |
|---|---|---|
| Agriculture (smallholder/subsistence) | ~98% informal | ~700,000 workers; predominantly elderly and female |
| Domestic work | ~85% informal | ~30,000 estimated; mostly female |
| Construction (subcontracted) | ~45% informal | Particularly subcontracted trades |
| Small retail and street trade | ~60% informal | Particularly outside Tbilisi |
| Accommodation and food (small operators) | ~35% informal | Guesthouses, family restaurants |
| Transport (taxi/minibus) | ~30% informal | App-based gig work growing |
| Manufacturing (small workshops) | ~22% informal | Declining with registration incentives |
| National average (all sectors) | ~37% informal | Down from ~45% in 2015 |
Source: Geostat Labour Force Survey; ILOSTAT. All figures refer to latest available period unless stated.
Informality in Georgia is falling slowly — from ~45% in 2015 to ~37% in 2024 — driven by pension system incentives (formal employees accumulate funded pension contributions since 2019) and expanded tax registration of small businesses. However, agriculture remains overwhelmingly informal, and new forms of platform/gig work are creating a new category of workers outside formal protection. Informal workers are excluded from: funded pension accumulation, unemployment benefit, OSH legal protections in practice, and most social insurance. The social cost is concentrated in old age (no pension) and in healthcare (reliance on UHC without supplemental coverage). See Working Poverty → and Funded Pension Law →
Working Poverty Georgia → · Law Funded Pension → · Law Employment Assistance → · Observatory →
Georgia's informal economy is large and structurally embedded. ILO estimates place informal employment at approximately 56-58% of total employment — meaning more than half of Georgia's workforce lacks formal contracts, social security coverage, and labour rights protections. This is among the highest informality rates in the EU neighbourhood, significantly above Armenia (44%) and comparable to Azerbaijan and Turkey.
Informality is concentrated in: subsistence and small-scale agriculture (the largest sector — approximately 360,000 informal "self-employed"); construction (estimated 65% informal employment rate); domestic work; small retail trade; and hospitality. Urban informal employment is primarily in construction and services; rural informal employment is dominated by subsistence farming.
Georgia's 56% informality rate is not primarily a compliance failure — it is a structural economic feature reflecting the large subsistence agricultural sector, the cost of formality relative to wages in low-productivity sectors, and inadequate social protection incentives that would make formal registration attractive to workers. GILS opposes a purely enforcement-led response: inspection of subsistence farmers is unworkable and counterproductive. The priority is to make formality rational and attractive — through simplified registration, meaningful social protection for formal workers, and economic transformation of the agricultural sector.
Formalisation is unattractive if formal status provides only obligations (tax, social contributions) without proportionate benefits. Extend: (1) basic health insurance to informal workers earning below median (currently only TSA households and pensioners covered universally); (2) pension accumulation for informal workers through simplified flat-rate option (GEL 30+GEL 20 state match/month); (3) OSH protections applying to all workplaces regardless of formality. Makes formal registration rational.
ILO Recommendation 204 (2015) · Moldova (informal worker health insurance) · Georgia pension informal inclusion (2024)Construction has 65% informality and highest accident rates. From 2026: all construction contracts above GEL 50,000 require electronic payroll — worker wages paid to registered bank account, contributions deducted at source. LIS inspectors verify electronically. Applies to: direct employer and all sub-contractors. Non-compliance: construction permit revoked. Estimated: 40,000 new formal construction registrations within 2 years.
Ukraine (construction e-payroll 2021) · Moldova (construction formality campaign) · Georgia LIS capacity (needs scaling)Businesses with turnover below GEL 500,000 registering as formal employers for first time receive: 3-year 50% reduction in employer social contribution (2% vs 4%); simplified quarterly contribution reporting (not monthly); no penalty for prior informality. Cost: GEL 60M/year estimated; expected revenue gain from newly formal micro-enterprises within 5 years: GEL 180M.
Georgia (existing micro-business simplification — extend it) · Romania (micro-enterprise tax reform) · Moldova (simplified employer regime)Subsistence farmers cannot individually formalise viably — individually, farming GEL 100/month, the administrative cost of formal registration exceeds the benefit. Cooperative model: 5+ farmers register jointly as a cooperative; cooperative employs members; contributions paid collectively; aggregate tax treatment. MoA cooperative development office provides registration support. Target: 5,000 cooperative formal agricultural jobs by 2027.
Georgia (cooperative development programme — expand) · Moldova (agricultural cooperative model) · ILO cooperative promotion R193Many small employers and workers are informally employed not from deliberate evasion but from unfamiliarity with registration procedures and benefits. RS + MLHSA joint outreach: (1) online formalisation guide in Georgian, Armenian, and Russian; (2) free one-hour formalisation consultation at all ESDC offices; (3) mobile registration units visiting markets and construction sites quarterly. Target: 25,000 new formal registrations annually from campaign.
ILO formalisation awareness campaigns · Moldova (ODIMM formalisation programme) · RS Georgia (e-service portal expansion)| ILO Convention | Subject | Ratified | Compliance | Key Gap |
|---|---|---|---|---|
| R204 | Transition to Formal Economy (Recommendation) | 2015 | Partial | Social protection extension incomplete; construction enforcement weak |
| C189 | Domestic Workers | Not ratified | n/a | Domestic workers — overwhelmingly informal — have no specific protection |
| C177 | Home Work | Not ratified | n/a | Home workers invisible to labour inspection |