AbstractInformality in the labour market is far from clearly defined in the development literature. To understand the nature of informality in terms of the legalistic and the productivity view, this paper makes an empirical contribution to the debate.This paper provides a detailed analysis of the informality dimensions in the Mexican labour market, employing a rich labour market data set.A substantial overlap between the current social security coverage, contracts and individual's job history is found. Moreover, age, education, marital status and scores in the Raven's test, an ability measure, are significant determinants for the various forms of informality. Copyright © 2011 John Wiley & Sons, Ltd.