The informal economy can refer to economic activities that occur outside the formal labor market. Most commonly, the formal labor market as compared to the informal labor market are referred to as "legal" and "illegal"; "market" and "non-market"; "paid" and "unpaid." The informal economy can also be referred to as "underground" or "criminal." Generally, the informal labor market refers to production, distribution and consumption of goods and services that are not accounted for in formal measurements of the economy.
Informal economic activities can include doing odd jobs or providing services for which you are paid in cash. Examples include: home renovations, car repairs, etc. These informal activities can be considered quasi-legal in that the work is considered "legitimate." But because it is unregulated and no taxes are paid, it is not considered part of the formal labor market economy. Other informal economic activities, including crime and drug dealing, are considered less legitimate or "criminal."