BRAZILIAN SURVEY OF THE URBAN INFORMAL SECTOR: MAIN RESULTS AND METHODOLOGICAL EVALUATION

 

 

Angela Filgueiras Jorge

Lucilia Valadao

IBGE Brazil

 

INTRODUCTION

 

The 1997 Brazilian Survey of the Urban Informal Sector is a household survey sample, undertaken by IBGE (the Brazilian Central Statistical Office). Its scope is national and it aim to determine the role and dimensions of the informal activities in Brazilian economy, through the identification of the owners of informal businesses, and the investigation of the operating characteristics of production units. The target population includes those living in a fixed places in urban areas, who are self-employed - own account workers and employers with up to 5 employees - in at least one working situation and working on non-agricultural activities. Domestic workers were excluded from the target population.

 

The survey Urban Informal Economy (ECINF) has been designed to generate information for the studying and planning of socio-economic development of the country. Its implementation comprehending all the households in urban areas in Brazil was done in 1997 in all States (Federate Units). This survey shall be realized every five years by IBGE.

 

This paper shows the main results of the survey of IBGE, namely in terms of the labor market of the informal sector, as well as the methodology used in the survey. The first section shows the definition of the informal sector and the boundaries of the universe of the survey. The second section specifies the employed methodology. The third section draws a profile of the main characteristics of the enterprises of the informal sector. The fourth section presents the characteristics of the persons occupied in the undertakings of the informal sector, both in terms of the employees and of the owners. And lastly, the final considerations.

 

1.      DEFINITION OF THE INFORMAL SECTOR AND BOUNDARIES OF THE UNIVERSE OF THE SURVEY

 

Based upon the recommendations of the 15th International Conference of Labor Statisticians, promoted by International Labor Organization in January 1993 it was considered that the point of departure to establish the boundaries of the informal sector was the economic activity - being understood as the production unit - and not the individual worker or the activity (s) he undertakes. The units of the informal sector were characterized by the small-scale production, a low level of organization and a relative inexistence of distinction between capital and work as production factors. The main characteristic of this units is a particular technical and social division of the work where the owner of the productive unit is also a worker.

 

The informal sector was constituted by the non-agricultural economic units that produced goods and services, with the main purpose of generating jobs and income for the persons involved. Units engaged only in the production of goods and services for self-consumption are excluded.

 

Despite the fact that registers are useful for analytical purposes, registration cannot be considered a criterion for the identification of the informal sector units. The concept of informality refers to the organization and development of the economic unit, and not to its legal status or to the relations it keeps with government authorities. In view of the many kinds of official registrations existing this criterion did not have a clear conceptual basis; it is not fit to historical and to international comparisons, and it could raise resistance on the interviewee's side. The definition of an economic unit as informal did not depend upon the place where the productive activity was developed, not from the use of fixed assets, not from the duration of the activities (permanent, seasonal or occasional) and not from the fact of its being the main or the secondary activity of the owner.

 

To make this definition statistically operational, it was decided that the informal sector comprehends all the economic units owned by own account workers and employers with up to 5 employees, living in urban areas, and being those units whatever the main or the secondary activity of their owners.

 

As a consequence of this operational definition, a first limitation of the survey arose from its urban feature. Therefore it missed to cover the non-agricultural activities undertaken by people who, lives in rural areas.

 

Illegal activities are also excluded because those activities cannot be easily recorded through a survey like this. Therefore, the universe of this survey is the 'socially accepted' economic activities.

 

In the operational definition of the productive units to be considered in the informal economy, it was taken as object of the survey those ones operating with up to 5 employees, regardless the number of owners or non-paid workers. Like any other, the cut in the number of employees was also an arbitrary cut. On the other hand, when limiting the employer's units in 5 salaried, certainly we left of capturing information of some units, mainly the manufacturing ones that should be classified in the informal section due to its organization and operation way.

 

The decision to investigate in deep the informers self-classified as employers (with up to 5 employees) and the own account workers, in at least one working situation was another fact to be considered. It meant to recognize that the individuals could take part of the informal economy by means either of their main job or the second one.

 

 

 

 

2.      METHODOLOGY OF THE SURVEY

 

The survey Urban Informal Economy (ECINF) is done by sample of households, placed in urban areas, where it seeked to identify the own account workers and the employers with up to 5 employees, in at least one working situation. Owners of economic units belonging to the scope of the informal economy were requested to give detailed information about the characteristics of the organization and operations of their units.

 

The survey was implemented into two phases. In the first phase - Listing - it was done an exhaustive recording of the households placed in the sectors selected for the sample, where lived owners of informal productive units, seen as follows. In the second phase the interviews took place in the households. It was seeked to combine in the questionnaire questions about the personal characteristics with questions about the economic unit.

 

2.1       SAMPLE DESIGN¹

 

The survey was undertaken through a probabilistic sample of households. The primary sampling units (PSUs) were urban census enumeration's areas (EA), which had an average size 300 household in the 1991 census.

 

Once the purpose of the survey was the production of estimates for the Nation, for each State and also for each of tem Metropolitan Areas the sampling design was applied in an independent way to each of those areas.

 

Sampling requirements for such a survey must deal with a population of units that are rare, heterogeneous and hard to detect than typical households. All these factors contribute to increase complexity of survey design, including frame preparation, sample selection and estimation procedures.

 

The urban census area were stratified firstly for their geographical condition, thus aiming to spread out the sample in order to ensure the representation of the many areas for which estimates are required. Therefore, in every State, two or three geographic strata has been defined, depending on whether the State had a Metropolitan Areas or not. The strata in each State thus included:

 

·        Stratum A   -   Urban census area included into the municipality of the Capital;

·        Stratum B   -   Urban census area belonging to other municipalities of Metropolitan Area;

·        Stratum C   - Urban census area belonging to the remaining municipalities of the State.

 

 

________________

¹ To know further detailed aspects related to the sample consult ALMEIDA e BIANCHINI (1998)

 

 

 

The second stage of the stratification process of the primary sampling units was used within each geographic stratum, and took into account the average household income of each enumeration area as obtained from the 1991 Population Census.

 

The use of the variable Income to stratify the sectors aimed to ensure the inclusion of owners of the informal sector (self employed and employers with up to five employees) coming from the various income classes.

 

To settle the sample size of each area of the survey it was established as the variable of design the total of owners of the informal sector which should be estimated with a sampling error, to be settled, related to the estimation (expressed by the variation coefficient - of cca. 5%, except for the units of Region North, where for reasons of costs, it was accepted the coefficient of 6%.)

 

2.2       SAMPLE SELECTION

 

An important phase of this survey is the frame preparation required to detect the target population for the selection of the households: the occupied households, with living owners of informal businesses. This frame also used to obtain information for secondary stratification by group of non-agricultural activities that constituted the object of the survey. The 8 groups of activities considered were the following:       

 

(1) Manufacturing and mineral extraction; (2) Construction; (3) Trade; (4) Lodging and food services; (5) Transportation; (6) Rendering services; (7) Technical and auxiliary services; (8) Others services.

 

The listing operation was a fundamental stage for the good success of the survey. It was in that stage that the addresses of the owners of informal units and their economic activities have been identified. The list of households where those owners lived was then used as a basis for the selection of the sample of informers of the survey. Only the households in which informal activities were identified were entitled to selection. It should be ensured, therefore, that the list of existing households in the selected sectors would be complete and that each of the households would be listed just once.

 

More than a mere directory of addresses of the household units, the list consisted of a small interview to collect basically the following data:

 

·        which residents of the household, with 10 or more years of age, worked in the referred period?

·        among the occupied residents, which ones were owners of economic units of the informal sector in at least one working situation?

·        what activities did these owners of the informal sector develop?

 

Recognizing that several owners of the informal sector performing separate and distinct activities may be found in each household, and, also, that each resident may perform more than one activity in the informal sector, it was necessary to classify each household in only one group of activity, in order to select the households according to the desired stratification. The activity of the household was chosen amongst those performed by its residents, owners of informal sector, according to priorities established for the group of activities, the purpose of which was to increase selection probabilities for rarer groups of activities. Otherwise it was anticipated that the activities of rendering services and the trade - which are the most usual amongst self-employed- would prevail. Thus the household was selected for a certain activity, although in the interview all activities performed by its residents have been considered.

 

Once realized the listing, the households to be interviewed have been selected in order to keep the proportionality between the several identified groups of activities, and each group of activity. It was sought to ensure, also, the presence of the rarer groups of activities.

 

In the 2,340 selected EAs, 1,079,555 households were listed and in 297,904 of those households lived owners of the informal sector units. The sharing by economic activity in national level was as follows: 10% Manufacturing and mineral extraction; 16% Construction; 27% Trade; 8% Lodging and Food services; 6% Transportation; 23% Rendering Services; 9% Technical and Auxiliary Services; and 1% Other Activities. These information can be seen at Table 1.

 

From the 297,904 listed households with resident owners of the informal sector, 48,934 were selected to compose the sample for interview, in the 27 Brazilian States

 

TABLE 1

 

States	Listed Households	Household with owner’s of Informal Sector	Manufacturing and mineral extraction	Construction	Trade	Lodgining & Food Services	Transport	Rendering Services	Technical & Auxilliary Services	Other Activities
Acre	23912	6964	603	1198	1882	502	435	1641	400	303
Alagoas	50636	13593	1267	1746	4370	1012	966	3160	957	115
Amapa	24143	6971	417	1097	2087	577	551	1875	316	51
Amazonas	28402	7505	846	1341	2515	529	463	1328	271	212
Bahia	61553	18459	1309	2829	4738	1898	1107	4765	1722	91
DistritoFederal	29025	7305	637	963	1851	761	441	1629	1009	14
Ceara	40964	12248	1890	1346	3698	899	644	2718	936	117
Espirilo Santo	56029	13983	1263	2721	3118	1243	665	2730	2008	36
Goias	44313	13031	1719	1923	3217	866	760	2993	1485	68
Maranhao	39623	13540	1561	2025	4086	927	941	3233	635	132
Mato Grosso	37436	11331	1523	2212	2564	813	803	2400	893	123
do Sul	35131	9422	575	2112	2484	568	447	2186	986	64
Minas Gerais	50172	13342	1827	2130	3371	927	1006	2409	1527	145
Para	30348	10132	985	1174	2898	1241	502	2171	1074	87
Paraiba	48794	13961	1754	1652	4572	1139	736	2957	1104	47
Parana	56708	15202	1419	3211	3410	793	971	3735	1499	155
Pemambuco	58648	16702	1734	2052	4944	1130	975	3997	1686	184
Piaui	34 974	9932	1252	1905	2883	749	502	1971	544	126
RiO de Janeiro	45577	10934	663	1905	2794	874	570	2667	1394	67
Rio Grande
do Norte	43324	11516	1119	1749	3584	866	765	2774	617	42
Rio Grande
do Sul	41454	10804	839	1666	2568	546	586	3006	1551	42
Rondonia	19920	5947	735	1073	1448	461	468	1240	475	47
Roraima	13289	3698	325	608	1192	289	224	842	178	40
Santa Catarina	42802	10768	1144	1754	2399	521	625	3206	983	136
Sao Paulo	51801	11819	983	1992	2670	974	8 29	2928	1312	131
Sergipe	47112	12332	1431	1689	3405	1232	939	2690	B58	86
Tocantins	23465	6463	756	1050	1688	575	447	1351	562	34
Brasil	1079555	297904	30 57 6	47123	B0436	22912	18 368	686D2	26982	2697

 

2.3.      Interview Stage

 

Two types of questionnaires were been used in the interview phase of the survey: the first one, the 'household questionnaire', was used to gather information

about the characteristics of the household and its members. The second one, 'the individual questionnaire', investigated the characteristics of the economics units belonging to informal sector as well as of its owners.

 

Household Questionnaire

 

The household questionnaire was the tool used to gather the information concerning each selected household and its members. Its purpose was to identify the number of residents of the selected households and mainly the labor situation for those aged 10 or more years old. It was necessary to confirm the data gathered in the List -made 60 days earlier.

 

Through the labor situation it was sought to identify the persons who were engaged as own account worker or as employers with up to 5 employees, that is, the owners of production units.

 

The characterization of the workers enables the identification and counting of owners of informal economic units, whom will be administered the individual questionnaire. In this sense, the most relevant variables were: status in employment on and size of the enterprise they worked in.

 

Individual Questionnaire

 

This questionnaire was used only for those people who had been identified as employers with up to 5 employees or own account workers, in at least one of the jobs they had, in the reference period.

 

Its first objective was to identify the activities undertaken in the small production units, in order to exclude lately the agricultural ones. Through variables such incomes and expenses, equipments, installations and number of employed persons, it was possible to appraise the sharing of those small units into the generation of output and employment. It was also investigated the way of functioning of the units and their relationship with other economic units. The level of organization, formalization and/or visibility of those economic units may be apprehended by several ways, such as the legal status of the business (constitution and register before public authorities), the type of accounting for the registering the operations, the composition of the labor chart and the place where the activity is carried on.

 

Starting from the pre-supposition that one of the basic characteristics of the informal sector is the strong identification between the production unit and the direct producer, it was also tried to draw from the informer the vision he had about his own enterprise and of his economic perspectives. In this sense, it was sought to raise the main problems they were facing to keep the business running, in what extent they were affected by the recessive juncture of the last years, and lastly which were their plans for the future (expansion/retraction/keeping the level of activity or quitting the business.

 

In the last part of the questionnaire, the individual characteristics of the owners were the surveyed variables. The characteristics of the last work each informer had before the present (business activity, position in the occupation, etc) allowed specific studies about the origin and the trajectory of the owners of the units of the informal sector.

 

Otherwise, the examination of the pre-conditions for the entry in the present activity as well as the time one remains in it allows to appraise in what extent the hypothesis raised in several studies about the "in-existence of barriers to the entry into informal sector" is applied to Brazilian reality.

 

Other variables were also raised, such as the characteristics of migration and the level of formal education, both fundamentals for any analysis pertaining to labor market.

 

And for the persons who had two or more jobs, questions were made about that job in which they were neither own account nor small employer.

 

Although the target population has been formed exclusively by households with owners of informal units, in the time elapsed between the listing and the interviews (about two months) some household have changed condition of being or not in the scope for the survey (either for having lost their resident owners of informal sector, or having moved from home, or even for some mistaken identification at time of the listing). There is still the possibility that a household - which was occupied at the time of the listing - become an empty household, or has been demolished, or no longer is a private household for it is now transformed into non-residential unit. In addition for some households it was impossible to complete the interview (refusal or closed household).

 

When the interview is conducted in a certain household, two situations may have occurred: there were residents owners of informal units (type A1) or not (type A2). All the remaining cases are non-interviews (type B).

 

Interviews with owners of the informal sector were done in 76% of the total of selected households; on 18% it was detected some changing in the situation of the residents, either because some who used to be owners of the informal sector at the time of the listing left to be at the time of the interview, or because some former residents moved to somewhere else and the new residents of the selected domicile did not belong to informal sector.  In the survey of 1997 a question was introduced, related to the job situation of the residents, with the purpose to investigate if such changing has occurred, or if the information was incorrectly caught at the time of the listing. The rate of persons who changed their jobs was 3.5%. And last, 6% of the total were undone interviews.

 

Table 2 shows the final type of selected household regarding the realization of the interviews for the survey.

 

 TABLE 2

 

 

2.4       Weighting and estimation procedures

 

The estimation of totals and corresponding precision was carried out using standard weighted estimators with treatment for non-response. Dead and out of scope units were included in the regular estimation of total and variances, but received a value of zero for every search variable.

 

Aiming to make easier the process of estimation for tabulation, it was calculated the weight of each domicile with owners of the informal sector, within each stratum and activity group, according the probabilities of selection linked to them. Besides the weights to estimate the characteristics of the owners of productive units of the informal sector, it was also calculated the weight to estimate the characteristics of the productive unit, since one single unit may be owned by one or more partners, and therefore it is necessary to apply a correcting factor to avoid over-estimation.

 

3       Main characteristics of the enterprises of the informal sector

 

The results of the survey showed that in Brazil, in October 1997, there were 9,477,973 informal enterprises, most of them in Southeast Region, and they occupied 12,870,421 people, comprehending own account workers, small employers, employees with and without formal job contracts, and non-paid workers. About 25% of non-agricultural urban workers are in informal sector whose contribution to GDP is around 8%.

 

The units of the informal sector in Brazil, in 1997, belonged mainly to own account workers (86% of the total of enterprises), while the small employers answered for 14%. Region Southeast kept nearly half the small business (46%) followed by Region Northeast, with 26%.

 

The main economic activities in this sector were: Trade (26%); and Rendering services (20%). In the Regions these two activities were also the most important in terms of participation, although the rates were different, having Trade reached 1/3 of the activities in Regions North and Northeast, as shown in Table 3.

 

94% of the surveyed enterprises had a single owner and 80% had only one person occupied, that is they were enterprises of own account workers who worked by themselves, with no partners or unpaid helpers.

 

Regarding the place of work, 67% of the productive activity were developed out the house, and this result was influenced by the weight of Trade although this same rate has been found in   other activities, except   for the   Manufacturing and Mineral Extraction which activity was developed mainly at home.

 

Table 3 -    Distribution of the enterprises of informal sector, by regions, according to groups of activity

 

Groups of activities	Total	Enterprises of the Informal Sector
		regions
		North	Northeast	Southeast	South	Center West
Absolute Value (Total)	9.477.973	513.574	2.484.350	4.334.048	1.464.910	680.952
Relative share	100.0	100.0	100.0	100.0	100.0	100.0
Construction	11.9	12.0	12.9	11.2	11.5	13.5
Trade	26.0	34.2	32.8	23.0	21.7	23.4
Lodging and Food services	8.3	8.3	10.1	8.5	4.9	8.2
Transportation	6.7	6.8	6.5	6.9	6.7	6.9
Rendering Services	19.9	18.5	18.4	20.2	21.9	19.9
Technical & Auxiliary Services	11.2	6.8	6.9	13.2	14.2	10.3
Other Services	0.3	0.2	0.2	0.5	0.2	0.3

Source: IBGE. Urban Informal Economy 1997

 

About 91% of the surveyed enterprises run along the whole year, and most of them (87%) had no legal constitution. The productive units that informed the value of their monthly income earned in average R$ 1405.00[2] in October 1997. The own account workers earned R$ 931.00 and the employer ones earned R$ 4,262.00. Region South had the highest average income (R$ 1,724.00) and Region Northeast had the lowest (R$ 849.00).

 

The enterprises that informed the value of their expenses spent an average of R$ 1,072.00, but the activity with the highest spending was Trade: R$ 1,872.00. Regarding the kind of expense, in general terms the enterprises spent most with electricity, water and telephone; and secondly with the purchase of goods for re-sa!e. However, this standard changed according to the activity. For instance, Trade and Lodging & Food Services spent more with goods for re-sale, while Rendering Services, Technical & Auxiliary Services, and Other Services spent more with electricity, water and telephone.

 

The largest part of the enterprises of the informal sector (93%) was profitable, getting an average of R$ 629.00 in profits. The activities that got more expressive profits were Other Services (R $ 1,579.00) and Technical & Auxiliary Services (R $ 1,388.00).

 

Region Northeast got the lowest average profit (R$ 326.00) while Southeast got the highest (R$ 782.00).

 

The great majority of the productive units (73%) made use of their own equipments and/or installations to develop their activities, being tools and utensils the larger relative weight. Only 16% of the total of enterprises that used equipments made investments and/or acquisitions in the year before the survey. Among those who did so, 62% made use of resources constituted mainly from profits from former years. The average value of those investments was R$ 3,767.00 and the activity to show the highest level was Transportation, who invested mainly in vehicles. From the total of enterprises that made investments and/or acquisitions the year before the survey, Region South had the highest average spending (R$ 5,807.00) and Northeast the lowest ((R$ 2,079.00).

 

The system of accounting, indicating how those small enterprises recorded their daily operations, showed that a large part of them (46%) had no records of any sort, or the owners themselves performed that function (39%), without using the services of an accountant, an usual practice in all the activities. Exactly for this reason, the most frequent way to determine the prices of their products and services was the negotiation with the very customers, in almost all the activities. The exceptions were Trade and Lodging and Food Services, that took into account the prices practiced by the competitors. In North Region only 5% of the total of surveyed enterprises had an accountant that made the control, while this practice reached 22% in South (Table 4).

 

 

The indexes of legalization indicated that in average 66% of the surveyed enterprises did not have municipal or state permit, while 34% actually had it. This difference was shorter in the enterprises to which the official permit was an important factor to develop the activity, such as: Lodging and Food Services; Transportation; Technical and Auxiliary Services; and Other Services. In these cases, cca.50% of the enterprises had some sort of permit. Most of them (87%) were not affiliated to any union or class entity and, also, had no legal constitution, which was a standard, found in all the activities. The productive units that had legal constitution most of the times were individual firms.

 

Table 4 -    Distribution of the enterprises of the informal sector, by regions, according to the accounting system.

 

Accounting System	Total	Enterprises of the informal sector
		Regions
		North	North-east	Southeast	South	Center-West
	1.	2.	3.	4.	5.	6.
Absolute Value (Total)	9.477.973	513.714	2.484.350	4.334.048	1.464.910	680,952
Relative share	100.0	100.0	100.0	100.0	100.0	100.0
No records at all	46.2	49.5	61.8	38.9	39.6	47.7
Records on his own	39.3	44.8	31.3	43.4	38.7	39.7
An accountant does the records	13.7	5.2	6.5	16.4	21.5	12.0
Other system	0.4	0.4	0.3	0.6	0.2	0.5

Source: IBGE, Urban Informal Economy 1997

 

In regional terms, again Regions North and Northeast were outstanding with the worse levels of legalization. 71% from the total of the enterprises in Region North did not have municipal or state permit and those reached 78% in Northeast. Regarding the affiliation to union or class entity, over 90% of the enterprises of these two regions were not affiliated, and also over 90% had no legal constitution (Table 5).

 

Table 5 •   Distribution of the enterprises of Informal Sector, by regions, according to indexes of legalization^

 

Records of Legalization	Total	Enterprises of the Informal Sector
		Regions
		North	North east	South east	South	Center West
Absolute Value (Total)	9.477.973	513.714	2.484.350	4.334.048	1.464.910	680.952
Relative Share	100.0	100.0	100.0	100.0	100.0	100.0
Municipal or state permit
Has	33.7	28.6	22.3	37.5	44.0	32.5
Has not	66.2	71.4	77.6	62.4	55.9	67.5
Undeclared	0.1	0.0	0.0	0.1	0.1	-
Affiliation to Union or Class Entity
Affilitated	11.8	8.9	6.6	14.2	15.0	11.0
Not affiliated	87.2	91.1	93.4	84.2	84.2	88.1
Undeclared	1.0	-	0.0	1.6	0.9	0.9
Kind of legal constitution
Individual firm	8.7	4.9	5.8	9.4	13.3	7.4
Society or Cooperative	4.8	1.2	1.7	6.1	7.7	3.7
No legal constitution	86.5	93.8	92.5	84.5	78.9	88.8
Undeclared	0.0	-	0.0	0.0	0.0	0.1

Source. IBGE, Urban Informal Economy 1997

 

The customers of the enterprises, in its largest part (86%), were varied and the sales were made either cash or in installments, except in the activities of Lodging and Food Services; Transports; Rendering Services and Other Services, where sales were basically cash.

 

Regarding the use of financing by the enterprises, in the three months before the survey, the results show that the largest majority (95%) did not make use of that, perhaps in view of the difficulties to access the credit entities or because of the high costs. Among those who did make use of it, the main sources of financing were, in first place, the banks, public or private (43%), and secondly with friends or relatives (32%).

 

According to the appraisal of the owners the main difficulty they faced in the year to run the business, was the shortness of customers, which was a general situation in all activities. However, when planning for the future, 37% of the enterprises of informal sector, in almost all the activities, intended to increase the undertaking, except for the Construction, and for Transportation, who intended to keep the same level. Notwithstanding 54% of the enterprises pointed out that in the 12 months before the survey the productive activity remained the same with no big oscillations.

 

The great majority of the enterprises (97%) had not received any kind of technical, legal or financial assistance, during the last 5 years. The remaining 3% received some sort of guidance mainly from non-governmental entities.

 

4 -     OCCUPIED PERSONS IN THE ENTERPRISES OF INFORMAL SECTOR

 

The sharing of the persons employed in the enterprises of the informal sector, in national level, showed that 67% were own account workers, 12% were employers, 10% were employees without formal contract, 7% were workers with formal contract and 4% were non-paid workers. Region Southeast presented a similar standard, but in the other regions the only common point was the majority of the own account workers. In Region South, for instance, the number of registered employees was larger than the unregistered ones. And in regions North and Northeast the number of unregistered was larger than the registered ones (Table 6).

 

Table 6 • Distribution of the occupied persons of the informal sector, by regions, according to Sex and status of employment

 

Sex and position in the occupation	Total		Enterprises of the Informal Sector
			Regions
			North	North east	Southeast	South	Center West
Absolute Value (Total)	12.870.421		661.698	3.249.376	5.944.577	2.048.473	966.297
Relative share	100.0		100.0	100.0	100.0	100.0	100.0
Sex
Men	64.3		65.2	62.3	64.3	66.0	66.5
Women	35.7		34.8	37.7	35.7
Status of employment
Own account worker		6.7	70.8	69.6	66.0	65.6	61.5
Employer		12.2	10.1	9.7	13.1	13.0	14.3
Employee with formal contract		6.8	2.8	3.1	7.9	10.8	6.6
Employee without formal contract		10.3	11.7	10.8	10.0	7.7	14.4
Unpaid worker		4.0	4.6	6.8	2.9	2.9	3.1

Source:IBGE, Urban Informal Economy 1997

 

Trade and Rendering Services were the activities that employed the largest number of workers (resp. 27% and 18%). In Regions North and Northeast Trade reached to employ cca. 1/3 of the total occupied population in Informal Sector (Table 7).

 

Table 7 - Distribution of the occupied persons of the informal sector, by regions, according to groups of activity.

 

Activity groups	Total	Enterprises of the Informal Sector
		Great Regions
		North	North east	Southeast	South	Center West
Absolute Value (Total)	12.870.421	661.698	3.249.376	5.944.577	2.048.473	966.297
Relative Share	100.0	100.0	100.0	100.0	100.0	100.0
Manufacturing & Mineral Extraction	13.5	12.2	15.0	124	13.7	13.7
Construction	13.8	12.1	10.6	14.6	16.0	15.6
Trade	27.4	34.3	33.3	24.9	23.9	25.5
Lodging and Food services	9.2	9.0	11.0	9.6	5.8	8.7
Transportation	5.7	6.4	5.8	5.6	5.4	5.6
Rendering Services	11.9	7.4	7.5	13.8	15.2	10.9
Technical and Auxilliary Services	11.9	7.4	7.5	13.8	15.2	10.9
Other Services	0.5	0.3	0.3	0.7	0.3	0.3

Source: IBGE, Urban Informal Economy 1997

 

In most of the categories there was predominance of men (64%) except among the non-paid ones where the number of women was  larger (62%).   As for the educational level, majority (45%) had incomplete high school, which was found both in relation to the status of employment and to sex.

 

The occupied persons, except for the owners, were concentrated into two groups of age: 34% in the group of 18 to 24 years, and 33% in the 25 to 39 years. Regarding sex, most of men were in the first group (37%), while most of women were in the second (36%). From the total, 72% had labor links with undetermined term, and 59% had no kind of kinship with the owner of the enterprise.

 

A significant parcel (85%) of the employees looked for the enterprise by means of personal relations, and is working there since recently (43% less than one year). 81% from the total worked 21 to 30 days per month and most of them (46%) worked over 40 hours per week.

 

In average, the income of the occupied persons in the enterprises of the informal sector, not included the owners, was R$ 240,00 (monthly), and men              (R$ 253,00) surpassed women (R$ 218,00) in all selected categories: educational level, position in the occupation, and groups of age. Regarding the educational level, the income increased in proportion of that, except for the persons with incomplete high school, who earned less than those whom had just elementary school.

 

In regional terms the differential of salaries between men and women reached 20% in favor of men in Region South. The only region where women earned more than men were North. The labor income of the persons occupied in informal sector, not including the owners, reached the highest average in Region South (R$ 295.00) and the lowest was in Northeast (R$ 163.00) as shown in Table 8.

 

Table 8 -    Average labor income of the persons occupied in enterprises of the informal sector (owners excluded), by regions, according to Sex and status of employment _

 

Sex and position in the occupation	Total	Average labour income of the persons occupied in the enterprises of the informal sector (owners excluded)
		regions
		North	North east	South east	South	Center West
Total	240	212	163	255	295	250
Men	253	206	170	271	323	264
Women	218	225	146	228	256	220
Employee with formal contract	290	320	206	292	313	317
Men	315	322	219	312	353	345
Women	261	316	192	270	266	274
Employee without formal contract	208	187	150	225	271	219
Men	222	186	160	246	288	232
Women	174	187	123	178	237	186

Source. IBGE, Urban Informal Economy 1997

 

Most of the owners of the businesses of informal sector were male (66%), 88% had no partners and large part of them became proprietor over ten years ago.

 

About 28% of the male owners pointed out their not finding a job as the main reason to have started the business. As for women they mention the complement of the family income as the most important factor. This trend also occurred in relation to the owners that used to be own account workers. As for the employers, both men and women, the main reason that drove them to start their business was the will to become independent.

 

The results indicate that 33% of the owners of informal sector did not need capital to start business, both men and women. The great majority (84%) started business by themselves.

 

The distribution of the owners in relation to groups of age was balanced: 42% in the range from 25 to 39 years, and the same rate for those from 40 to 59 years. But while men were more present in the second range (42%), women predominated in the younger range (44%).

 

The prevailing educational level of the owners was the same for both sexes: incomplete high school. Only 26% from the total of owners had college graduation or full high school. This situation was alike in the great regions, and the outstanding one in terms of education was Southeast, where 11 % had college graduation and 17% had full high school (Table 9).

 

Table 9 -        Distribution of the owners of enterprises of informal sector, by regions, according to sex, groups of age and educational level

 

Sex, age groups and educational level	Total	Enterprises of the Informal Sector
		regions
		North	Northeast		Southeast	South	Center West
Absolute Value (Total)	9.959.065	524.477	2.503.890		4.641.637	1.570.172	718.889
Relative Share	100.0	100.0	100.0		100.0	100.0	100.0
Sex
Men	65.9	65.7	63.3	66.1		68.9	67.0
Women	341	34.3	36.7	33.9		31.1	33.0
Groups of Age
10 to 17 years	1.4	1.3	2.3	0.9		1.4	1.7
18 to 24 years	8.0	8.7	9.9	7.0		7.6	8.7
25 to 39 years	42.2	46.0	41.9	42.0		41.4	43.5
40 to 59 years	41.5	3.0	38.6	43.2		43.1	40.3
60 or more years	6.9	7.1	7.3	6.9		6.5	5.8
Educational Level
Illiterate or less than 1 year of instruction	7.7	9.5	16.6	4.1		3.7	8.0
Elementary school – Unfinished	46.9	53.2	49.0	45.0		46.3	49.1
Elementary school – Concluded	12.6	11.3	9.7	14.1		13.5	11.7
High School –unfinished	6.6	7.5	5.9	6.3		7.8	7.6
High school –Concluded	15.6	14.5	13.6	16.7		15.9	14.8
College – Unfinished	2.5	1.4	1.3	2.8		3.7	2.2
College – Concluded	8.0