IMPROVED STATISTICS ON THE INFORMAL ECONOMY

 

 

- by Martha Chen, Margarita Guerrero and Joann Vaanek

 

 

(Note prepared by Martha Chen, Margarita Guerrero and Joann Vaanek (WIEGO) for 6^th Session of the Delhi Group, 16-18 September 2002.)

 

The Report of the Committee on the Informal Economy of the Ninetieth Session of the International Labour Conference (ILC) specified statistics as a specific priority for the ILO work programme and technical assistance to countries:

 

“ ….assist member States to collect, analyze and disseminate consistent, disaggregated statistics on the size, composition and contribution of the informal economy that will enable identification of specific groups of workers and economic units and their problems in the informal economy and that will inform the formulation of appropriate policies and programme.”

 

The recommendation builds on the work of the Statistics Bureau of the ILO, the Expert Group on Informal Sector Statistics – the Delhi Group, the research policy network, Women in Informal Employment: Globalizing and Organizing (WIEGO) and a number of countries which have placed high priority on the development of statistics on the informal economy.  The present meeting of the Delhi Group provides a timely opportunity to review and discuss a more comprehensive plan to develop and improve statistics on the informal economy.  The proposals presented in this note draw on two ILO publications prepared for the ILC ’02 General Discussion on the Informal Economy: Women and Men in the Informal Economy: A Statistical Picture[1], a report prepared by a team of consultants affiliated with WIEGO and the Delhi Group and the Compendium of Official Statistics on Employment in the Informal Sector[2] prepared by Ralf Hussmanns and Brigette du Jeu.  They also draw on a side meeting organised by WIEGO in cooperation with the ILO in Geneva, in June of this year, to discuss future work to improve statistics on the informal economy.      

 

Future efforts to improve statistics on the informal economy would be guided by the following principles:

 

·        Both informal jobs and informal enterprises are covered, as defined by the concept of the informal economy approved by the 90^th session of the ILC;

·        Tabulations on informal employment in reports and in data archives are linked to total employment so that the population can be presented in a “tree-like” structure with disaggregation into a series of component categories.  This disaggregation would begin with working-age and non-working age population and include the unemployed and the employed; self-employed and paid employed, agriculture and non-agriculture and formal and informal workers (see attached figure).  This framework would provide for policy relevant statistics that are not easily available today as well as greater comparability of international statistics.

·        Greater efforts will be made to promote use of national data on informal employment by researchers and policy makers; this is a critical step in justifying the allocation of resources for further development of data on the informal economy.  Currently, there has been limited use of national data on the informal sector, mainly by national accountants and not by policy makers or economic analysts.  An important new use of these data is analysis linking data on informal employment with income-expenditure and poverty statistics.

 

Specific goals and activities:

 

Concepts and Methods to Improve Data Collection

 

-         Operationalization of the concept of “Informal employment”, as distinct from “employment in the informal sector”; case studies on this topic are reviewed in agenda item “a “ of the present meeting; other lines of investigation may be found in the project of the European Industrial Relations Observator (EIRO)[3], “Non-permanent employment, quality of work and industrial relations” or in the data archives of surveys for Latin America;

 

-          methods and procedures for the collection of statistics on informal employment on a regular basis, including preparation of a manual on the collection of these data in developing countries and the development of a common module covering both employment in the informal sector and informal jobs to be included in national labour force surveys;

 

-          improve measures to identify the composition and characteristics of informal employment; this should involve further methodological efforts related to the “place of work” and “employment status” variables and further efforts to collect and tabulate these data in national data collection activities;

 

-          improve concepts and measurement of formal and informal employment in agriculture.

 

 

 

 

Preparation of global and regional estimates of the size and contribution of the informal economy.

 

-         ILO has proposed a methodology already used to produce the ILO global and regional estimates of child labour and of unemployment in preparing estimates of informal employment[4]. It was emphasised that to apply the method, it is important to have data for China and Nigeria.

 

Policy-oriented research reports

 

-         national studies of the informal economy as for example, NAFTA’s Impact on the Female Work Force in Mexico[5], and the case studies prepared for ILO on India, Mexico, and South Africa (ILO,2001)[6];

-         Analyses to explore the relationship between informal employment and poverty, as for example discussed in agenda item “b”; additional research topics include the links between informal employment and social protection, informal employment and productivity, gender and informal employment as well as analyses of the components of informal employment.

 

Data archive for national data on informal economy

 

-         The preparation of a data archive is a critical next step in preserving the studies that now exist and in facilitating use of these data.  However, in view of the limited availability and use of data, the problems of comparability and the complexity of setting up a data archive, an incremental approach is the best way to proceed in the development of a data archive.  Stage# 1 would involve developing a database of existing macro data from as many countries as possible, structured to reflect all components of employment, formal and informal.  In addition, steps need to be taken to preserve existing national micro-data sets on total employment, formal and informal, so they will not be destroyed (as discussed in agenda item “c”).  CD-ROMs of these existing data sets would be collected from as many countries as possible and could be distributed to interested users.  Stage#2, a more complex approach to archiving, would require improvement in the available data on total employment, formal and informal, as well as more widespread use of the data.  As these conditions improve, the micro data for as many countries as possible would be harmonized and archived into a common database to facilitate international comparisons.