About the Index
Measuring the Structural Conditions for Illicit Labor
Illicit labor markets — encompassing forced labor, informal employment outside any legal framework, and work embedded in criminal supply chains — represent one of the most consequential and least-measured dimensions of global economic insecurity. Standard labor statistics systematically undercount these workers, and the populations most exposed are precisely those least visible to formal data collection.
The Labor Market Vulnerability Index addresses this gap by constructing a composite measure of the structural conditions that make illicit employment more likely. Rather than attempting to directly count illicit workers — an exercise that is both methodologically fraught and politically contested — the LMVI measures the underlying risk environment across five dimensions: economic desperation, state legitimacy, social fragmentation, illicit opportunity structures, and financial flows.
The index is paired with an Illicit Employment Estimate (IEE) that applies the LMVI score as an amplifier to a country's vulnerable labor pool — defined as unemployed workers, the working poor, and youth not in education, employment, or training — to produce a headcount estimate of likely illicit employment. The global IEE stands at approximately 204.7 million workers, a figure that should be understood as a structural baseline rather than a precise count.
The LMVI is designed for policymakers, development institutions, and security analysts who need a structured, cross-country framework for assessing labor market fragility. It is updated annually as source data becomes available and is published alongside full methodology documentation.
Push-Pull Framework
The LMVI is organized around a Push-Pull framework. Push factors (D1–D3) capture conditions that drive workers out of the formal economy: poverty, weak governance, and social exclusion. Pull factors (D4–D5) capture the structures that draw workers into illicit markets: criminal networks and financial opacity.
Each dimension is scored 0–20, producing a composite LMVI score of 0–100. Confidence intervals are derived from data availability and source consistency; countries with limited data coverage are flagged accordingly.
Research Team
Elsabet Jones
Project Manager
Alex de Roos
Data Analyst
Citation: Center for Emerging Economies (2025). Labor Market Vulnerability Index. Washington DC.
Interactive Index
Global Labor Market Vulnerability
Click a country to view its full vulnerability profile, dimension breakdown, and illicit employment estimate.
Key Findings
What the Index Reveals
Sub-Saharan Africa and fragile states in the Middle East and South Asia dominate the highest-risk tier. Sudan, the DRC, Somalia, Syria, and South Sudan all score above 70, driven by the convergence of economic desperation, collapsed state legitimacy, and entrenched criminal networks.
The global illicit employment estimate stands at approximately 204.7 million workers — a figure that exceeds the combined labor force of Germany, France, and the United Kingdom. This is not a peripheral phenomenon; it is a structural feature of the global economy.
Push factors (economic desperation, state illegitimacy, social fragmentation) account for the majority of variance in high-risk scores. Pull factors (illicit opportunity structures, financial opacity) amplify vulnerability but rarely drive it in isolation.
Middle-income countries in Latin America and Southeast Asia cluster in the Moderate tier (30–45), where formal labor markets coexist with substantial shadow economies. These are the most policy-tractable cases: institutional reform can meaningfully shift outcomes.
Financial opacity (D5) is the dimension most correlated with high-income country vulnerability. Several OECD members score surprisingly high on financial flows, reflecting the role of secrecy jurisdictions and money laundering infrastructure in enabling illicit labor globally.
Confidence intervals are widest in data-limited environments — precisely the countries where vulnerability is highest. This asymmetry in data availability is itself a policy risk: the least-governed states are the hardest to monitor and the most likely to harbor large illicit labor markets.
Risk Classification
Five-Tier Vulnerability Scale
State fragility, conflict, and entrenched criminal economies
Weak institutions, large informal sectors, significant displacement
Mixed formal/informal labor markets, policy-tractable vulnerabilities
Functioning institutions with residual structural vulnerabilities
Strong governance, robust labor protections, low illicit opportunity
Methodology
Five Dimensions, 36 Metrics
Each dimension is scored 0–20 using a combination of normalized indicators drawn from World Bank, ILO, UNODC, Transparency International, and other authoritative sources. Scores are aggregated into a composite LMVI of 0–100.
Measures the degree to which economic precarity pushes workers toward illicit employment. High scores reflect environments where formal wages are insufficient, social safety nets are absent, and inflation erodes real incomes.
Selected Indicators
Youth unemployment, working poor rate, social protection coverage, consumer price inflation
Captures the quality of governance and the state's capacity to enforce labor standards. Weak state legitimacy removes the institutional deterrents that keep workers and employers within the formal economy.
Selected Indicators
Corruption Perceptions Index, Rule of Law, Voice and Accountability
Reflects the degree to which social cohesion has broken down. Displaced populations, extreme inequality, and demographic exclusion create pools of workers with limited formal-sector access.
Selected Indicators
Internal displacement, Gini coefficient, female labor force participation, group grievance
Measures the structural availability of illicit employment. Where criminal networks are established and shadow economies are large, the pull toward informal and illicit work is strongest.
Selected Indicators
Drug trafficking index, human trafficking score, organized crime presence, shadow economy size
Captures the financial infrastructure that enables illicit labor to persist. Jurisdictions with weak AML frameworks and high financial secrecy provide the payment and concealment mechanisms that sustain illicit employment at scale.
Selected Indicators
Anti-money laundering score, Financial Secrecy Index
Policy Implications
From Index to Action
Targeting Development Finance
The LMVI provides a principled basis for prioritizing labor market interventions within development finance portfolios. Countries in the Moderate tier — where institutional reform is feasible — represent the highest-return targets for investment in labor formalization and social protection expansion.
Economic Security Screening
For governments and multilateral institutions assessing supply chain integrity, the LMVI offers a systematic framework for identifying jurisdictions where forced labor and illicit employment are structurally embedded. High D4 scores in particular signal elevated risk for goods entering global supply chains.
Financial Sector Compliance
The D5 dimension — financial flows and AML vulnerability — maps directly onto correspondent banking and trade finance risk. Institutions seeking to operationalize labor-related ESG criteria can use LMVI scores as a first-pass screen for counterparty due diligence in high-risk jurisdictions.