Structural Challenges and Policy Solutions for Transitioning to a Formal Economy Based on Social Justice

The informal economy in Iran, with a significant share of its workforce and GDP, poses profound challenges to job security, productivity, and, notably, social justice. This article adopts an interdisciplinary approach to examine the structure and consequences of Iran's informal economy, proposing comprehensive policy solutions for a transition to a formal economy grounded in social justice. The research methodology combines secondary data analysis from credible national and international reports (such as the International Labour Organization) with a thorough review of academic literature (2018-2024) across the fields of economics, sociology of labor, and social policy. Findings indicate that the primary barriers to formalization include high insurance costs, administrative complexities, weak oversight, and insufficient access to skills training. A comparative analysis of successful global experiences from Brazil and Turkey underscores the importance of targeted financial incentives, affordable insurance schemes, and skill empowerment programs. By presenting an integrated policy framework that emphasizes strengthening tripartism and the role of worker organizations, employer associations, and cooperatives, this article assists Iranian policymakers in increasing formalization rates while achieving sustainable development and social justice. The innovation of this article lies in elucidating the multifaceted dimensions of the informal economy and offering a practical model for a just transition.