How to initiate a transition to formal economy, when economic reasons fall short of explaining why workers opt for informal jobs - or why they are pushed into informal jobs? This study probes into the drivers of informality, with emphasis on rural employment, in Kyrgyzstan, Tajikistan, and Uzbekistan by drawing on an extensive literature review and on the results of a specially commissioned survey of rural workers, employers and policy makers in the three countries. Building on this survey's results, the study shows that perceptions and choices of informal economy actors are shaped by a reality more complex than economic gains, and that workers are well-informed of the advantages and disadvantages of their choices.

Following an approach that prioritizes the well-being of workers, quality of jobs, and respect for the worker rights in 'transition to formality' the paper concludes with a set of policy and programming recommendations on data improvement, digitalization for SME growth and formalization, enhancing access to social protection, protecting and empowering women in informal employment, and establishing and promoting decent work guarantees.