Report of the Fourth Meeting of the Expert Group

1. Organisation of   the meeting

The Fourth Meeting of the Expert Group on Informal Sector   Statistics (Delhi Group) was organised and hosted by the Bureau of Statistics of   the International Labour Office (ILO) at its headquarters in Geneva. The Meeting   took place during the period 28-30 August 2000.

1. Participation

Representatives from nine countries (Australia, Brazil,   Ethiopia, India, Nepal, Mexico, Philippines, Thailand and Turkey), three   international organisations (ILO, UNSD and ESCAP) and WIEGO (Women in Informal   Employment - Globalizing and Organizing) participated in the Meeting. Several   experts from the ILO Project on Measurement of the variable "place of work"   (GLO/98/318/B/l 1/31), funded by the UNSD/IDRC/UNDP Project on Gender Issues in   the Measurement of Paid and Unpaid Work, also participated in the meeting. In   all 31 participants attended the meeting. The list of participants is attached   as Annex 1.

1.b  Inauguration

The Meeting was opened by the Chairperson, Mr. Sastry   (Director General and Chief Executive Officer, National Sample Survey   Organisation, India).

Mr. Ashagrie, Director of the ILO Bureau of Statistics,   welcomed the participants on behalf of the host organisation. He was pleased to   note that so many countries and organisations were represented. After having   recalled how the concept of the informal sector was linked with the ILO, he   stressed the multiple activities undertaken by the ILO regarding the informal   sector, including the adoption of a resolution on informal sector statistics by   the 15th ICLS in 1993. He indicated that urban informal sector   employment as a percentage of total urban employment had been chosen by the ILO   as one out of 18 Key Indicators of the Labour Market (KILM), which the office   had started to publish on a regular basis for as many countries as possible. He   recalled that a report on "Employment and social protection in the informal   sector: Challenges and future agenda" had been prepared for discussion by the   Committee on Employment and Social Policy of the ILO Governing Body during its   March 2000 session, and announced that it had been proposed to include the   informal sector as an item for general discussion on the agenda of the   International Labour Conference 2002, and/or to hold a Global Conference on the   informal sector in 2002 (i.e. 30 years after the first appearance of the term   "informal sector"). He emphasised that at the international level, the Delhi   Group was one of the very few groups dealing with statistical issues that were   especially relevant to less developed countries. He expressed the hope that   deliberations of the Group would be helpful in formulating technical guidelines   on particular issues as a supplement to the existing international   recommendations, and in proposing the development of international   recommendations on related new topics, such as the statistical measurement of   informal employment relationships. The ILO would continue supporting the Delhi   Group and contributing to its work as much as possible.

l.c   Agenda

The   agenda of the Meeting was adopted as follows:


Topic1:Results of surveys on the informal sector conducted by different   countries - Advantages and limitations of different survey methods and survey   designs            for the data collection

Topic   2: Methodology for developing more   accurate measures of value added

Topic 3: Estimation   of the contribution of the informal sector to GDP on a regular basis .

Topic 4: Development   of strategies to address sampling frame and weighting issues

Topic 5: Future work   of the Delhi Group.

Topic 6: Other   business, including 

1) Handbook for   Measurement of the Non-Observed Economy

2) Alternative   aggregates and sub-divisions for the informal sector in ISIC,   Rev.3

Adoption of the recommendations of the   meeting.

 Closing of the   meeting

The detailed agenda is given in Annex   II.

Topics 1 and 4 were dealt with in Technical Session One,   topics 2 and 3 in Technical Session Two, and topics 5 and 6 in Technical Session   Three.

The Meeting designated Mr. Charmes (WIEGO) as Chairperson   for Session One, Mr. Shrestha (Nepal) as Chairperson for Session Two, and Mr.   Sastry (India) as Chairperson for Session Three, the adoption of recommendations   and the closing of the meeting. The following participants were designated as   rapporteurs: Ms. Guerrero (UNSD) for Session One, Mr. Loh (ESCAP) for Session   Two, Ms. du Jeu (ILO) for the inauguration and Session Three, and Mr. Hussmanns   (ILO) for the adoption of recommendations and the closing of the   meeting.

1.d   Documentation

Twenty papers, as listed in Annex -IIII, were presented   during the meeting.

2.   Technical   sessions

2.1  Summary   Report on Session One

Topic 1: Results of surveys on the informal sector conducted   by different countries •Advantages and limitations of different survey methods and survey   designs for the data collection and

Topic 4: Development of strategies to address sampling   frame and weighting   issues

a Papers presented.

The following papers were presented in the sessions   covering these topics:

-      Report to the   Delhi Group by an expert group meeting on "place of work"

-      Improving   measurement of the informal sector: Collecting data on "place of work" (Report   of the meeting)

-     The measurement   of place of work in Jordan

-       Examining   place of work in South Africa

-       Review of the   variable "place of work" in two Latin  American countries

-      Survey on   informal sector in Thailand (J. Boonperm)

-       Result of the   survey on informal sector conducted in Ethiopia: Survey methods and design for   data collection (Y. Mossa)

-       Measurement   of informal sector - the Indian experience (Country paper)

-       Informal   economy: Definition and survey methods (J. Unni)

-     Brazilian   Survey of the Urban Informal Sector (A. Jorge)

-       Turkey   Experience on Informal Sector Employment (E. Tasti)   

  1. -     Informal sector surveys: Advantages and   limitations of different survey methods and survey designs for the data   collection (R. Hussmanns)

b            Report of the expert group meeting on   "place of work".

The expert group meeting on place of work was convened by   the ILO project on measurement of the variable "place of work" which is a study   being undertaken as part of the UNSD/IDRC/UNDP Project on Gender Issues in the   Measurement of Paid and Unpaid Work. The meetings report to the Delhi Group   presented the major findings of the pilot studies on including "place of work"   in the labour force survey of Jordan, three new surveys in South Africa (labour   force survey, survey of youth employment, time-use survey) and of the assessment   of analysis of data on place of work from ongoing surveys in Mexico and   Colombia. The report also presented the conclusions of the meeting which are   summarized in the paper "Improving measurement of the informal sector:   Collecting data on place of work"1. The major conclusions are listed   below: 

  1.     Measurement objectives. A primary   objective of developing a classification for "place of work" is to develop appropriate tools to be used in regular statistical surveys, particularly labour   force and informal sector surveys. A better measurement of work remains the   major goal. 
  2. Analytical objectives. A main analytical objective is to identify groups of workers such as home workers, street vendors and domestic workers who are particularly vulnerable in relation to the lack and difficulty of organising, the physical risks associated with the place of work, and the absence of social protection. 
  3. Measurement objectives require that in household surveys, scope and coverage should carefully consider: i) measurement problems associated with womens work and child labour; ii) recording of multiple economic activities; and iii) seasonal variations in economic activities which are difficult to measure for a short reference period (such as "past week" in labour force surveys).
  4. The physical place of work - where the worker spends most of the time - rather than the place of the economic unit to which he or she is attached is the appropriate unit of classification for the analytical objectives mentioned above.
  5. One well-designed single question could be sufficient for the measurement of place of work. However, in order to identify specific types of workers such as home-based workers, home workers, and street vendors, the "place of work" variable will have to be further cross-classified by industry, occupation and status in employment.


  6. An appropriate typology of "place of work" should be developed based on a conceptual framework (with emphasis on the conceptual framework). The ILO study will provide the starting point for this.


  7. Countries should be encouraged to conduct similar studies       

    The Meeting noted the importance of defining a typology of   "place of work" but observed that based on country experiences there were   difficulties in operationalizing the variable in household surveys in meeting   the proposed measurement objective. Thus, there would be a need to test any   proposed typology in labour force surveys and in surveys of the informal sector.   It was also pointed out that information on place of work may be useful in   constructing sampling frames for informal sector operators and enterprises and   this could be included as an objective for its inclusion in household   surveys.

    c.   Thailand.      

    Sources of production data on the informal sector in   Thailand are very limited; only the Household Manufacturing Industry Survey has   been conducted on a regular basis (biennial since 1991). This survey covers   households engaged in all manufacturing industries except the basic metal   industry with less than 10 persons engaged. A household is said to be engaged in   household manufacturing if the activity is done within the household premises by   at least one member of the household

    The Meeting noted that Thailand uses "less than 10 workers"   as the cut-off to define informal sector employment and that it would be useful   for purposes of international comparisons to report data separately for   enterprises with "less than 5 employees" as recommended by the Delhi   Group.  

    d.   Ethiopia.

    The 1996 Urban Informal Sector Sample Survey was the first   national survey of its kind conducted in Ethiopia, It is expected to be carried   out on a regular basis on a 3-5 year interval.    In this survey, informal sector activities are defined as "household-type   establishments/activities which are mainly engaged in marketed production, are   not registered companies or cooperatives, have no full written book of accounts,   have less than 10 persons engaged in the activity, and have no   license." 

    The survey covered only urban centers; a probability sample   of 48 such centers was selected consisting of all 10 regional state capitals, 5   major towns with a population of 100,000 and above and a systematic pps sample   of 33 other urban centers. Secondary sampling units (SSUs) were EAs and tertiary   sampling units (TSUs) were households with at least one informal sector   operator. SSUs were selected within each urban center using systematic pps   sampling; 30 TSUs per SSU were selected systematically from a list of households   prepared at the beginning of the fieldwork.

    The Meeting observed that the sample design of the survey   did not take into account the distribution of different types of economic   activities in the population. It was further noted that frame construction for   informal sector enterprises was done through a listing of households in sample   SSUs in which informal sector operators within the household were identified; it   would be useful to evaluate how reliable the listing procedure was in terms of   identifying informal sector operators.

    e.    India.

    The National Sample Survey Organisation conducted the first   ever nation-wide survey on informal non-agricultural enterprises over the period   July 1999 to June 2000. The survey is part of the 55th round of the   integrated system of household socio-economic surveys which consisted of three   modules: consumer expenditure, employment and unemployment (labour force) and a   study of the informal sector. The survey period is divided into four sub-rounds   of three months duration each.

    The informal sector study was designed to generate   estimates of both the size and output of the informal sector. The enterprise   survey was designed to provide estimates for the number of enterprises in the   informal sector and their output. In this survey, informal sector enterprises   are defined to be all unincorporated proprietary and partnership   enterprises.

    A two-stage sampling design was adopted. PSUs were selected   using a stratified circular systematic sampling design; village blocks were   selected with pps sampling with population as size and urban blocks were   selected with equal probability. SSUs (enterprises) within sample PSUs were   selected using circular systematic sampling.

    Compared to the enterprise approach used in the past for   identifying informal sector enterprises, this new survey used the   "household-cum-enterprise" approach. In this approach, the frame of enterprises   was constructed by canvassing households within selected village/urban blocks,   as follows: 

    a) enterprises run by the household and located in the same household where   the household lives (described as "home based" in the listing   schedule);

    b) enterprises run without any fixed premises by a household   member;

    c) household unincorporated enterprises   operating in fixed locations outside of the household were listed in the area   where they were located;  and

    d) within a   listing area, all enterprises satisfying the definition but not associated with   a household were included.

    It was noted that this new approach led to a higher   estimate of informal sector enterprises compared to the enterprise approach of   the 1998 special enterprise survey. Since the informal sector is a subset of the   "unorganised sector" which was the coverage of the special enterprise survey,   the paper concluded that the household-cum-enterprise approach improves   identification of informal sector enterprises.

    The estimated number of non-agricultural enterprises in the   informal sector is 45.8 million (56.9 percent of them in rural areas). These   enterprises employ 83.2 million workers (50.4 percent in rural areas). Estimates   of employment in the informal sector can be generated from both the labour force   module and the survey on informal non-agricultural enterprises. A comparison of   the results would shed light on issues related to methods for identifying   informal sector workers; however, labour force survey results were not available   in the report. These preliminary survey estimates were based on a sample size of   97,572 enterprises (56,498 rural and 41,074 urban).

    The Meeting discussed coverage, sampling and weighting   issues that arise from the listing procedure adopted by the survey.   Considerations of cost of such a large survey and institutionalization were also   raised.

    f. WIEGO.

    The paper proposes a definition of  "employment in the informal economy" as   follows:

      1. a)   First component- non-wage employment: 

      a.1 Own-account   workers

      a.2 Employers/owners   of informal enterprises with at least one hired worker

      a.3 Unpaid family   helpers in both types of informal enterprises   

      1. b)  Second component- wage employment:

      b.1       Employees   in the enterprises of informal employers

      b.2       Outworkers   or home workers: persons working at home, or on premises of their choice other than the employers,   to produce goods or services on a contract or order for a specific employer or   contractor

      b.3  Independent   wage workers not attached to only one employer, and providing services to   individuals, households and enterprises, e.g., maid servants working for   households

      b.4 Informal   employment in formal sector enterprises: workers whose pay and benefits do not   conform to existing labour regulations.

      In this definition, informal enterprises refer to informal   sector enterprises as defined by the 15th ICLS and the SNA 1993.   "First component" and (b.l) workers are the corresponding informal sector   workers. Following the 15th ICLS Resolution on employment in the informal   sector, outworkers or home workers (b.2) and independent wage workers not   attached to only one employer (b.3) are in the informal sector if they are   employed by informal sector enterprises; otherwise, they are in the formal   sector. Workers in category (b.4) are formal sector workers according to the   ICLS Resolution.

      The concept of "informal employment" and the categorization   of workers proposed as an operational definition seeks to improve the   identification of these groups of workers in labour force and other surveys   aimed at estimating their size and output. Special mention is made of "invisible   groups of informal workers" who are mostly women who work in the home (home   workers) or on the streets (street vendors). Another measurement issue that the   categories address is that of dependent home workers who may be in the informal   or formal sector under the enterprise-based definition of the 15th ICLS. In the   proposed concept on informal employment, dependent home workers are to be   classified in one group. 

      Estimates of these groups of workers from existing data   sources were presented for Bangladesh, India, Nepal, Pakistan, and Sri   Lanka.

      The paper further discusses how and why current official   concepts, classifications and methods do not identify well the specific types of   workers. For example, the ICSE is insufficient in identifying workers in   category b.4; information on contractual arrangements is necessary. Although the   current version of ICSE includes a home worker category, the classification is   not generally applied at such detailed level in surveys. Also, although ISCO   identifies street vendors at the 3-digit level, usually tabulations are done at   higher levels of aggregation; a place of work variable in the survey instrument   would be needed to identify such workers.

      Finally, the paper discusses a survey methodology to obtain   data on employment and output in the informal economy which is anchored on a   "linked household-cum-enterprise survey approach" in identifying informal sector   workers and enterprises. This approach is basically the one used in the   1999-2000 Indian survey on non-agricultural informal sector enterprises   described above. Details of the survey methods and estimates of informal   employment were presented in the paper. 

      The Meeting noted that while total employment estimates   from labour force and informal sector surveys may include workers in the   informal economy there still are problems of under coverage. It was also   recognized that while in many countries improvements in the labour force surveys   and conduct of informal sector surveys had enabled better estimation of informal   sector employment as defined by the 15th ICLS, in the current survey methods it   was not easy to classify workers into the proposed categories. The Meeting   agreed that surveys operationalizing the enterprise-based definition of the   informal sector measured only a part of the home workers category, and that home   workers associated with formal enterprises were currently not covered in such   surveys. It was observed that the enterprise-based definition of the informal   sector allowed for the measurement of its output within the SNA framework; with   output as the measurement priority, considerations of conditions of work,   precarious forms of employment, social protection, etc. were often not taken   into account. The Meeting proposed that the Delhi Group should begin to include   these considerations in its concerns and that its future agenda should cover   discussions of concepts, definitions and methods that address the measurement   issues raised in the paper. 

      g.    Brazil

      The 1997 Brazilian Survey of the Urban Informal Sector was   a nationwide mixed household and enterprise survey. The survey covered all   non-agricultural economic units (in relation to either main or secondary   economic activities) owned by own-account workers and employers with up to 5   employees, living in urban areas. Estimation domains were national, state, and   ten metropolitan areas. 

      A multi-stage sample design was used and independently   applied to each of the state and metropolitan area domains. PSUs were urban   census enumeration areas which were stratified into three geographic strata.   Enumeration areas within each geographic stratum were further stratified by   income size based on the average household income. SSUs were households in which   informal sector activities were identified. A frame of SSUs within sample PSUs   was constructed. Households were classified into eight industry strata. The   industry of a household was based on the economic activity of the informal   sector operators in the household. In cases where there was more than one   operator or more than one activity, the household was classified into one of the   eight industry strata following a priority criterion. The priority criterion was   set to ensure that a higher selection probability would result for rarer groups   of activities. All operators of informal sector activities in sampled households   were included in the survey. 

      In the 2,340 selected PSUs, 1.08 million households were   listed; 0.30 million of these households were identified as having informal   sector units. The final sample consisted of 48,934 households in which informal   sector units operated.

      The paper provided an informative discussion on potential   frame problems and quality control procedures taken to minimize these. The frame   problems arose as there was a two-months lag between the listing and selection   of informal sector units and the enumeration phase of the   survey.

      There are an estimated 9.5 million informal sector   enterprises with 12.87 million workers in urban areas in   Brazil.

      The meeting encouraged the practice of reporting quality   indicators when presenting survey methods as illustrated in the report by   Brazil. 

      h. Turkey

      New data collection on the informal sector in Turkey was   instituted in 2000; it includes an independent Informal Sector Survey and   additional questions for better estimation of informal sector employment in the   Household Labour Force Surveys (HLFS). 

      The informal sector is defined as all non-agricultural   economic units which are unincorporated (establishments whose legal status is   individual ownership or simple partnership), paying lump sum tax or no tax at   all, and working with 1-9 persons engaged.    Based on this definition, the 2000 HLFS estimated that 16 percent of   total employment in urban areas is in the informal sector.

      The Informal Sector Survey covered all persons of 6 years   of age and over who worked as self-employed persons or employers in   unincorporated establishments with less than 10 persons engaged in the   non-agricultural sector in settlements in urban areas. The survey is being   conducted over four quarters with field operations in February, May, August and   November. Mode of data collection is a computer-assisted personal interview   (CAPI).

      A two-step cluster sampling design was used. The first step   consisted of selecting approximately equal-sized clusters of households with   equal probability in urban areas. In the second step, all informal sector units   in the sample clusters were selected. A total of 25,666 informal sector units in   2,496 sample clusters were selected. These units were grouped into four   sub-samples; each sub-sample was covered in one of the four quarters. There are   two types of informal sector units, i.e. households and establishments, which   were listed separately.

      A post-enumeration study on quality was conducted after the   first quarter operations and results indicated that there were high interviewer   errors. These findings were used to increase the quality of the survey   operations during the subsequent quarters.

      The Meeting discussed issues pertaining to the use of CAPI   and the quality of data on taxation.


      The paper provides an overview of the various survey   methods and survey designs used by countries for the collection of data on the   informal sector. These include: labour force surveys for monitoring of the   evolution of informal sector employment and its characteristics; household   income and expenditure surveys for the collection of data on household final   consumption expenditure for goods and services produced in the informal sector;   and informal sector surveys for the collection of detailed structural   information on the composition of the informal sector in terms of the number and   characteristics of the enterprises involved, and for an in-depth study of the   production activities, employment, income generation, etc. of informal sector   enterprises, of the conditions and constraints under which they operate, their   organisation and relationships with the formal sector and the public   authorities, etc.   Informal sector   surveys include establishment surveys as well as mixed household and enterprise   surveys. The latter can be designed as independent (i.e. stand-alone) informal   sector surveys, as informal sector modules attached to existing household   surveys, or as parts of integrated surveys. The paper discusses the design   requirements and respective advantages and limitations of the different survey   methods and arrangements.

      The paper stresses the need to adapt survey designs and   operations to the particular characteristics of the informal sector. It   concludes that there is no single method of data collection on the informal   sector that can be recommended universally. The measurement objectives pursued,   which depend upon the data requirements of each country, the organisation of its   statistical system and the amount of available resources, determine what is the   most appropriate survey method for a particular case. A combination of survey   methods can be useful for development of a comprehensive programme of informal   sector data collection. The collection of data on the same topic (e.g.   employment) through more than one survey (e.g. through a labour force survey and   an informal sector survey) enables comparisons to be made and thus helps to   evaluate the quality of the data.

      The paper also includes a section dealing with measures   that can help to reduce non-sampling errors and improve the quality of informal   sector survey data. As a complement to the paper, figures were presented showing   the outcome of the listing operation and sample selection, as well as the   non-response rates by reason, as they had been documented for the informal   sector surveys of various countries.

      During the discussion, the Meeting suggested that   evaluation of the quality of data obtained from informal sector surveys should   be included on the agenda of the Delhi Group as part of its future work. In this   connection, the usefulness of conducting post enumeration surveys was pointed   out. It was also proposed to undertake work on the use of randomized response   techniques and to explore the possibility of using sealed, unidentifiable   envelopes for data provided by respondents in reply to sensitive   questions.

      2.2  Summary   Report on Session Two

      Topic 2: Methodology for developing more accurate   measures of value added;


      Topic 3: Estimation of the contribution of the informal   sector to GDP on a regular basis

      a   Papers presented.

      The following papers were presented in the sessions   covering these topics:

      -         Unincorporated micro-businesses: Business characteristics and   contribution to national employment  (Z.   Abbasi)

      -       Reducing   measurement error in informal sector surveys    (Z. Abbasi)

      -       Measuring the   contribution of the informal sector in the Philippines  (R. Virola)

      -       Estimation of   the contribution of informal sector to GDP on a regular basis  (M.K  Low)

      -       Measurement   of informal sector  (H.   Shrestha)

      -       Mexican household survey system:   Contribution in estimating the informal sectors GDP share  (R. Negrete)

      -     The   contribution of informal sector to GDP in developing countries: Assessment,   estimates, methods, orientations for the future    (J. Charmes)

      b.    Australia

      It was noted that though the Australian Bureau of   Statistics had not conducted surveys specifically intended to measure the   informal sector, there were regular surveys from which information pertaining to   unincorporated micro-businesses (i.e. unincorporated businesses with less than 5   employees and own-account enterprises) was available. These micro-businesses   have a number of characteristic features of informal sector enterprises. These   surveys include the Business Register, the Growth and Performance Survey, the   Survey of Employment and Earnings, the Labour Force Survey and the Household   Supplementary Survey on small business characteristics.

      It was noted that the main interest on statistics   pertaining to the informal sector related to a measure of the contribution of   this sector in terms of value added and statistics on labour and employment   related issues. It was noted that as estimates of reasonable reliability would   suffice for users, statisticians should not over-engineer main tools for data   collection. Nevertheless, when data collection relates to data of a sensitive   nature, such as in the case of information on income and revenue on which value   added is based, there may be a need to employ inquiry techniques such as a   randomised response technique to ensure that respondents do not hide the correct   information. Another technique suggested was by obtaining sensitive data related   to collecting the components of the estimate from independent samples for   production units engaged in similar economic activities.

      The meeting discussed the means by which the quality of   survey results might be improved. Apart from the techniques which are familiar   to survey statisticians such as survey design, questionnaire design, training of   interviewers and technical issues, it was noted that the confidence and   cooperation of the respondents remained the single most important factor to   ensure the quality of response. It was noted that building respondent confidence   was a long term process which included building the reputation of the   statistical agencies for ensuring confidentiality of information provided which   could not be made available to regulatory authorities.

      The Australian Bureau of Statistics also undertakes   publicity campaigns in relation to the population census through the media and   by other means, as well as providing the full range of major statistical   publications of the Bureau through the Library Extension Programme to about 700   libraries in Australia. Every respondent is entitled to receive a copy of the   publication related to the interview, on request. It was noted, however, that   only around 5% of the respondents made such a request. Despite all these   efforts, there is always a risk of respondent fatigue, especially when the   expectation of the benefits of the survey in terms of government policies is not   fulfilled.

      c.    Philippines

      The meeting was informed that in the Philippines the   important role of the informal sector had already been recognised in the 1970s   and several studies had been made by the academia to characterise it. In 1988,   the National Statistics Office conducted a Survey of Household-Operated   Activities to fill the data gap on the contribution of household-operated   activities to the economy. In 1995, an Urban Informal Sector Survey was   conducted. The survey used the definition of the informal sector as adopted by   the 15th International Conference of Labour Statisticians.

      The paper outlines the methodology adopted for making   estimates of value added of the "unorganised sector" and its contribution to   GDP. It explains the methodology for estimating the value added for the   different branches of economic activity. Where relevant to the "industry" within   the "unorganised sector", value added has generally been estimated as the   product of the number of workers and the value added per worker. It was   acknowledged that the assumption that the gross value added (GVA) per employee   for small establishments equals the GVA per employee in the informal sector for   manufacturing, trade, etc. has to be validated. Further, it was noted that the   estimate of the number of workers derived from different survey approaches had   inherent weaknesses.


      It was noted that to improve the estimates, there was a   need to update the parameters used in the estimate. With regard to the informal   sector, there should be clear guidelines on what specific statistical data   needed to be generated and on the frequency of generating the data   series.

      d.   ESCAP

      It was explained that the approach advocated in the paper   had been based on the Philippine experience described in the previous paper.   Earlier discussions had shown that the measurement of changes over time in the   contribution of the informal sector to GDP was often considered to be more   important than the measurement of the level itself. The paper suggests that   indirect estimates, such as the approaches adopted by the Philippines, would   provide reasonable estimates for the regular computation of the GDP. This was   especially so when survey costs, such as those incurred by the mixed survey   approach, might be too high for conducting the survey regularly. Nevertheless,   it was important to compile a benchmark estimate on the GDP upon which the   indirect estimates could build.

      It was noted that the indirect estimate method was based on   two variables, namely the number of workers in the informal sector and the value   added per worker. The accuracy of the estimate is influenced not only by the   accuracy of the individual parameters, but also by the detail of the breakdowns   of economic activity to which the parameters relate.


      In recalling the earlier discussions on the suitability of   obtaining the estimate of the number of workers employed in the informal sector   based on different survey approaches, and the experiences of Mexico and Colombia   in including in their labour force surveys questions such as on the place of   work, employment status and secondary job, it was conjectured that labour force   statistics supplemented by such information could improve on the estimates of   the informal sector, when they are used in combination with the results of the   establishment surveys. It was also noted that for this purpose attention should   be paid to improving the quality in the reporting of the branch of economic   activity of the worker.

      With regard to the estimates of value added per worker it   was noted that the corresponding parameter might be suitably extrapolated based   on relevant price indices. To improve the accuracy of the parameter, it was   conjectured that the frame used for a mixed survey could be used in undertaking   a small-scale purposive survey on the sector for which the estimate of value   added per worker is needed. 


      The   Meeting was informed that the recently concluded Nepal Labour Force Survey   (NLFS) 1998/1999 defined the informal sector in terms of the number of paid   employees employed by the unit, and that it did not include registration as a   criterion. 

      The Meeting noted that many countries in different parts of   the world were currently undertaking an overall revision of national accounts   statistics taking 2000 as a new base year. It suggested that the opportunity of   adopting a new base year should be seized to introduce new or additional time   series. Further, in introducing a sequence of accounts by institutional sectors,   estimates of the informal sector as a sub-sector of the household sector should   also be made. 

      The Meeting discussed difficulties faced by national   accountants in incorporating improved or revised statistics into the regular   national accounts series. The problem was also relevant to the case of   separating informal sector statistics from existing household sector accounts.   It was suggested that the development of satellite accounts for the informal   sector might be a way out. However, it was recalled that the SNA 1993   recommended to provide information on the informal sector as part of the central   accounting framework.

      f.   Mexico.

      Mexico uses the mixed survey approach to collect data for   estimation of the size of employment in the informal sector and the GDP share of   the sector.   The Mexican experience has   shown that the definition of the informal sector as adopted by the ICLS was both   conceptually sound and practically feasible for data collection. Further,   informal sector had also been specifically identified within the Mexican   national accounts system, so that the contribution to GDP by the sector no   longer had to be estimated as a residual.  

      The Employment Surveys conducted in Mexico are the basis   for undertaking mixed household and enterprise surveys to provide data needed   for the compilation of a satellite account for the informal sector pertaining to   the production account. In the biennial mixed surveys covering the urban areas,   information pertaining to "informal" or "precarious" employment was also   obtained. The mixed surveys also provided data for estimating output by labour   input, as well as value added. The data used for estimating value added were   obtained through replies to related accounting questions, rather than a direct   question on value added. The Meeting noted that the continuous Employment Survey   provided statistics for estimation of the trends in "precarious" employment in   the urban areas, and that the National Employment Survey provided similar   statistics for rural areas. 

      The Meeting noted that due to the availability of results   of mixed surveys, and the possibility of estimating directly the contribution of   the informal sector, it was possible to exclude the shadow economy from the   informal sector, which would be difficult to do if the residual approach were   used.

      g.   WIEGO

      The paper recalled that the interest of national   accountants in the so-called "traditional sector" (which was akin to the present   day "informal sector") had a long history. In Africa, estimates of the   "traditional sector" had been available for a few countries since the 1960s.   Indeed, without such estimates the GDP of most newly independent African   countries would have been reduced to a tiny figure. In Africa, the estimates of   the informal sector in national accounts were the most frequent and regular as   compared with other continents.

      The use of the commodity flow approach for GDP compilation   was discussed. It was noted that when the production originating from those in   the "formal" sector or the shadow economy was underreported, the residual would   overstate the actual contribution attributable to the informal   sector.

      It was underlined that most of the estimates of the share   of the informal sector in total GDP presented in the paper were based on   methodologies which did not use the results of recent national surveys on the   informal sector, or did not use them completely.   The introduction of the SNA 1993 was an   opportunity for many countries to establish a new base year and to fully use the   results of mixed surveys carried out recently. 

      It was noted that the measurement of employment in the   informal sector through annual labour force surveys could provide a useful basis   for assessing the trends of the contribution of the informal sector to the GDP,   by branch of economic activity. Nevertheless, there remained the problem of   underestimation of womens activities, particularly in the informal sector. The   non-governmental organisation "Women in Informal Employment: Globalizing and   Organizing" (WIEGO) had endeavoured to gather two sets of data to meet its   information needs. These were GDP by industry and by institutional sector, • and   labour force by industry, by formal/informal sector and by   sex.


      The Meeting noted that a better estimate of womens   contribution to GDP might be obtained where efforts were made to measure womens   secondary activities to uncover reporting on multiple jobs. In countries where   womens economic activity was underestimated in labour force surveys, time use   surveys might provide new perspectives. It was assumed that where statistics   showed lower productivity for women, it might be due to an increased difficulty   of capturing the output, value added and income generated of female activities,   because these activities were more often home-based and, in some cultures, more   often street-based than male activities.

      2.3            Summary   Report on Session Three

      Topic 5:       Future work of the Delhi Group;   and

      Topic 6:       Other business

      a    Continuation of the group

      Mr. Sastry opened the session by asking the question of   whether or not the Delhi Group should continue to exist. A large majority of the   participants answered the question with a definitive "yes". After discussion, it   was agreed that:

      1 Since it was established, the Delhi Group   had touched upon many important issues but it had not yet gone into sufficient   detail on many of these issues ;

      2. A city group could be considered   successful if it had visible outputs;

      3.An important output of the Delhi Group   had been the recommendations on the definition of the informal sector which the   Third Meeting had made for      international reporting;

      4. As far as statistics of employment in the   informal sector were concerned, an inventory of country practices had been made   and the information was available     in the ILO;

      5. Other work items included in the terms of   reference, which had been specified during the First Meeting, had not yet been   accomplished;

      6.  New issues had been raised (e.g. integration of   informal sector statistics in the national statistical system at affordable   cost);

      7. In order to lead to more universal   results, it would be important that papers presented during the meetings dealt   with specific issues rather than being country     reports. 

      It was suggested that the Secretariat of the Delhi Group   should request the UNSD to promote the Minimum Informal Sector Data Set for   National Accounts as recommended by the Delhi Group at its first meeting, and   that the recommendations concerning the international reporting of informal   sector statistics adopted during the third meeting of the Delhi Group should be   disseminated to countries by the Secretariat and/or the ILO in order to receive   feed-back and comments.

      A proposal was made that the Delhi Group should prepare a   handbook describing and evaluating the various techniques of informal sector   measurement.

      b  Agenda of the next meeting

      Proposals for the agenda of the next meeting should be sent   to the Secretariat before February 2001. The Secretariat will then prepare a   provisional agenda, which will be circulated to members of the group for   comment.

      c    Date and venue of the next   meeting 

      The Brazilian Institute for Geography and Statistics has   offered to host the next meeting of the Delhi Group in Rio de Janeiro (Brazil)   in September 2001.

      d    Other business

      1  Handbook for Measurement of the Non-Observed   Economy

      Mr. Hussmanns (ILO) introduced an initiative that had been   taken recently by a group of international organisations and national   statistical offices to prepare a "Handbook for Measurement of the Non-Observed   Economy (Underground, Informal Sector, and Illegal Activities)". The group   includes the statistics units of the OECD (project leader), ILO, IMF and the   Commonwealth of Independent States (CIS), as well as the national statistical   offices of Italy, the Netherlands and the Russian Federation. Regarding the   informal sector, the Handbook has two objectives: enhancing the exhaustiveness   of GDP measures through inclusion of informal sector activities in the national   accounts, and identifying the informal sector separately through compilation of   accounts for it as a sub-sector of the SNA institutional sector   "households".   A general description of   the project and an outline of the contents of the Handbook were distributed to   the participants of the meeting.

      The Delhi Group was requested to endorse the initiative and   members of the group (or there colleagues from the national accounts) were   invited to contribute to the Handbook in sending comments on the available draft   version to the OECD.

      After considerable discussion, the Meeting recognised the   usefulness of such an initiative and agreed to appreciate it. It was pointed   out, however, that the Delhi Group was not in a position to deal with the   Handbook as a group. Nevertheless, members of the group were encouraged to   comment on the draft version in their individual capacity as informal sector   experts. It was requested that the informal sector chapter of the Handbook be   made available to the Group for consideration. 

      2   Alternative structure of ISIC, Rev.   3 for the informal sector 

      Mr. Hussmanns (ILO) introduced the issue in mentioning that   "kind of economic activity" (or "industry") was an important variable for the   tabulation of data on the informal sector and for the stratification of informal   sector survey samples. However, past experience had shown that there were a   number of problems regarding the use of ISIC, Rev, 3 for the classification of   informal sector activities by kind of economic activity. These could be grouped   in three categories: (a) the large number of tabulation categories at the most   aggregate level of the classification; (b) the heterogeneity of activities   included in some of the tabulation categories and divisions; and (c) a lack of   detail for some of the classes. For these reasons, there was a need to develop   an alternative structure of ISIC, Rev. 3 for the informal sector, which was   consistent with the standard classification. The ILO had submitted a proposal to   develop such a structure to the UN Technical Subgroup of the Expert Group on   International Classifications. A copy of the proposal was distributed to the   participants of the meeting.


      The Meeting supported the proposal.

      3.   Recommendations

      At the end of the meeting, the Delhi Group adopted the   following recommendations:

      2. i)  The Expert Group on Informal Sector Statistics recommends   that countries include the variable "place of work" in labour force and informal   sector surveys and endorses recommendations of the ILO Project on Measurement of   Place of Work, as follows: 

      -        The physical place of work - where the   worker spends most of the time - rather than the place of the economic unit to   which he or she is attached, is the          appropriate unit of classification when the   unit of analysis is the worker.

      -       One   well-designed single question may be sufficient for the identification of place   of work. However, in order to identify specific types of workers such as   home-based workers, home workers, and street vendors, data on "place of work"   will have to be cross-classified at least by industry, occupation and status in   employment.

      -        An   appropriate typology of "place of work" should be developed based on a   conceptual framework.

      A main analytical objective for inclusion of "place of   work" in household surveys is to identify groups of workers such as home   workers, street vendors and domestic workers who are particularly vulnerable in   relation to the lack and difficulty of organising, the physical risks associated   with the place of work, and the absence of social   protection.

      With respect to informal sector survey methods, the use of   "place of work" in the construction of sampling frames may be explored and   studied.

      ii)The   Expert Group recognises that there is no single method of data collection on the   informal sector as different survey methods are applicable for different survey   objectives and national statistical systems. Nevertheless, given several country   experiences in mixed household and enterprise surveys conducted on a large-scale   and an increasing use of this type of survey, the Expert Group recommends that   studies be undertaken and available experience be evaluated on the construction   of different types of frames including dual frames (household and establishment)   and on sample design issues related to better coverage of informal sector   activities (e.g., how to deal with rare types of activities, clustered or area   concentrations of activities).

      iii) For   purposes of assisting countries in planning, designing and conducting informal   sector surveys, the Expert Group recommends that a systematic evaluation of data   quality of informal sector surveys, that have been conducted, be undertaken.   Furthermore, countries are encouraged to report data quality indicators of their   surveys.


      iv)The ICLS   93 definition of the informal sector is now being usefully implemented by an   increasing number of countries to obtain estimates of the size of the employment   in the informal sector and contribution in terms of value added. There is a need   to emphasize separate estimation of employment of certain groups within the IS   such as home-based workers and street vendors. Further, efforts need to be made   for separate estimation of employment of certain vulnerable groups of workers   such as out-workers, domestic workers, as well as precarious employment  in    the formal sector.

      v) The Expert   Group should provide guidelines on the role/place of informal sector surveys   within data collection programmes of national statistical systems. Guidance on   the frequency of data collection and core statistics/indicators on the informal   sector are important in institutionalising such data collection given the need   for prioritising and economising resources.

      vi)  The Expert   Group acknowledges that the mixed survey approach is a useful vehicle to provide   data for making direct estimates on the economic characteristics of the informal   sector. Having obtained the benchmark data for any particular year, it was   suggested that in order to save on the costs, estimates of trends may be   obtained for intervening years.

      viii) The Expert Group appreciates the   initiative taken recently by a group of international and national organisations   led by the OECD to prepare a Handbook for Measurement of the Non-Observed   Economy (Underground, Informal Sector, and Illegal activities). Experts   participating in the Delhi Group are invited to contribute to the draft of the   Handbook by sending comments to the OECD. The Expert Group requests that the   informal sector chapter of the Handbook be made available to the Group for   consideration. 

      ix)The Expert   Group supports the proposal made to the UN Technical Subgroup of the Expert   Group on International Classifications to develop alternative aggregations and   sub­divisions of ISIC, Rev. 3 groupings for the tabulation and analysis of data   on the informal sector. 

      4. Closing of the   meeting

      On behalf of the chair of the Delhi Group and the   participants of the meeting, Mr. Sastry (India) and Mr. Shrestha (Nepal) thanked   the ILO for having organised and hosted the meeting. The meeting was then   closed.


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