Labour informality in forestry: A longitudinal (2009-2020) cross-country analysis of determinants in 70 developing countries

Informality accounts for a significant proportion of the forestry labour market and provides a critical livelihood option for millions of people in developing regions. Recent estimates reveal that at least three million people were informally employed in forestry. Nonetheless, informality is highly characterized by decent work deficits, profoundly impacting employment quality and sectoral development. It is thus crucial to contextualize which factors determine the prevalence of informality in the forestry sector to advance decent work and livelihood opportunities. The present study examines macro-level determinants of forestry-related informality using a cross-country panel dataset over the 2009–2020 period. Our analysis covers 70 developing countries in Africa, the Americas and Asia. Results from econometric models confirm that the widespread informality in forestry is a co-presence of exclusion and exit perspectives. Informality is significantly associated with economic recession and deforestation after controlling for possible endogeneity. Study findings further suggest that fostering education and forest certification compliance, along with control of corruption and ratifying international labour standards on freedom of association and labour inspection, can lessen the incidence of forestry-related informality. A balanced mix of policies and strategies that emphasize improving the identified determinants is thus decisive. This further necessitates tailoring them to the nature of forestry labour markets to address the existing issues of informality in the sector. Expanding temporal and spatial coverage of statistics on the informal economy will enhance future studies to examine patterns of informality in forestry across regions' development levels and evaluate the long-term effects of determinant factors.