Final answer:
Informal sector establishments comprise businesses and work that operate outside the formal regulatory framework, such as under-the-table labor and unlicensed vending, and make up a significant portion of economies in many regions, including 10% of the U.S. economy.
Step-by-step explanation:
An informal sector establishment refers to businesses and employment that are not officially regulated by the government. It includes work done off the books, such as under-the-table labor by nannies, gardeners, and housecleaners, and also extends to unlicensed street vendors or taxi drivers. The underground economy or informal sector is significant in peripheral and semi-peripheral nations, and analysts estimate it comprises around 10% of the U.S. economy. This sector notably gains attention for its role in economic stability during recessions, by providing livelihoods that are somewhat insulated from broader economic downturns, yet incomes are generally very low. Notably, the informal economy is a crucial source of employment for women in peripheral nations, comprising the majority of their economic activity.
In terms of types of businesses, small 'Mom and Pop firms' like inner-city grocery stores may continue to operate even if they do not earn substantial profits. These businesses often serve communities and provide owners with self-employment, maintaining their existence. Moreover, in places with less effective national governance, such as Somalia, informal trade remains a primary mode of commerce, supporting the population through private transactions.