Factors Affecting the Informal Sector and its Relationship with Sustainable Development in Egypt

Abstract

(1) Background: This research aims to study the factors influencing the informal sector in Egypt and analyze their relationships with the Sustainable Development Goals (SDGs) within the framework of Egypt’s Vision 2030. (2) Methods: The research is based on an integrated scientific methodology combining quantitative and qualitative analysis, utilizing secondary data from official statistics and international organization reports, in addition to primary field data collected through questionnaires and interviews. (3) Results: The study highlights the role of economic factors, such as limited income and non-inclusive economic growth, in driving labor towards informal employment. It also illustrates the impact of social and demographic factors, including gender, age, and educational level, in determining individuals’ opportunities to engage in the informal sector. The research further reveals that the poor quality of education and vocational training contributes to the reproduction of informal labor and limits its opportunities for transitioning to formal work. The levels of informal employment are also affected by institutional and regulatory factors, such as administrative complexity, weak governance, the multiplicity of regulatory bodies, and limited trust in formal institutions. The research also shows that digital technological transformation presents an opportunity to expand informal work patterns, but it raises challenges for labor protection and integration into the legal framework. Environmental and spatial factors play a role in promoting the fragility of livelihoods and pushing individuals toward informal work, especially in rural areas, unplanned settlements, and in the context of climate change. The research reveals a close interrelation between these factors and the achievement of the SDGs, such as No Poverty, Decent Work and Economic Growth, Reduced Inequalities, Quality Education, strong institutions, digital transformation, and environmental sustainability. The findings emphasize that addressing the informal sector requires comprehensive, integrated policies that consider all economic, social, educational, institutional, technological, and environmental factors to ensure the achievement of inclusive and sustainable development. (4) Conclusions: The discussion concludes that addressing the informal sector requires comprehensive and integrated policies that account for all influencing factors. Focus must be placed on formalizing the sector, improving the quality of education and training, enhancing governance, utilizing technology, and considering environmental factors. Such an approach effectively and sustainably supports the realization of the SDGs and Egypt Vision (2030).