Developing counties, like Nepal is still in tense to maintain the level of political
stability, economic growth, development, and employment which are the main
issues in one side of the economy and on the other, the majority of the people find
shelter in the informal sector in the absence of sluggish growing formal sector.
Most of the people are engaged in informal economy that has created varying
effects on them in terms of employment and income generations. The latter seems to
be determined mainly by the household property, level of literacy, the number of
persons employed in any unit and investment. However, there is no apparent
differentiation in the income earnings between males and females; the latter seems
to be more efficient and articulate in many ways. Income earnings have been higher
in the urban location than that of the rural sector. Income level and the determining
factors seem to vary among different location and sexes. This study tries to compare
the nature and characteristics of informal sector both at national as well as
international levels. The government must play effective policy as well as to uplift
informal economy for the economic development as a whole. To identify the
informal sector properly in Nepal, a national wide survey that covers overall
aspects should be considered before taking any step.