Market economy and informalisation of workers are strongly correlated to each other. Give your opinion in support of this statement

Solution
Market economy and informalisation of workers are strongly correlated because informalisation of workers has a positive effect on the economy.
During periods of high aggregate demand, firms find it optimal to use informal labour more intensively because marginal costs with such labours are lower than in the case of formal technology and when demand is low, hiring costs of informal labours are lower than that of hiring formal labours.
So, It is always seen that the firms in the economies with the informal labour markets have more flexibility to expand output in an optimum way. This gives a chance for the development of the economy as the output can be increased and decreased as per the demand of the economy.

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