to the formal sector (Vasquez 2024). These efforts can boost enterprises’ productivity and workers’ employability, equipping them with new skills and competencies required to move into decent formal work arrangements (ILO 2014). In addition, targeted efforts can help improve workers’ productivity and support them during transition, ensuring they are fully AUS=Australia; BD=Brunei Darussalam; CDA=Canada; CHL=Chile; PRC=China; HKC=Hong Kong, China; INA=Indonesia; JPN=Japan; ROK=Korea; MAS=Malaysia; MEX=Mexico; NZ=New Zealand; PNG=Papua New Guinea; PE=Peru; PHL=The Philippines; RUS=Russia; SGP=Singapore; CT=Chinese Taipei; THA=Thailand; USA=United States; VN=Viet Nam Note: Programme for International Student Assessment (PISA) score data are not available for Papua New Guinea. Informal output utilised by the data analysis is a Multiple Indicators, Multiple Causes (MIMIC) estimation. PISA (accessed 14 July 2025); World Bank Informal Economy Database (accessed 21 April 2025); and APEC Complex bureaucracy, high costs and burdensome administrative procedures can discourage individuals and businesses from formalising their status and operations. This situation is particularly common among micro, small and medium enterprises (MSMEs), which are more likely to employ workers with a low-education background. Their small scale of business and