Report of the Fifth Meeting of the
Expert Group on Informal Sector Statistics
(Delhi Group)
1. Organisation of the meeting
The
fifth meeting of the Expert Group on Informal Sector Statistics (De lhi Group) was organised and hosted by the
Ministry of Statistics and Programme Implementation, Government of India in New
Delhi during the period 19-21 September 2001.
1.1
Participants
Representatives from five countries viz. India,
Indonesia, Korea, Mexico and Nepal, the international organisations ILO and ESCAP
and other organisations viz. Women in Informal Employment – Globalising and
Organising (WIEGO), Gujarat Institute of Development Research (GIDR), National
Council for Applied Economic Research (NCAER), Socio Economic Research Centre
(SERC), Self Employed Women’s Association (SEWA) and National Commission on
Labour participated in the meting. In
all 37 participants attended the meeting. List of participants is at Annex-I.
1.2
Inauguration
Mr.
K. V. Irniraya, Secretary, Ministry of Statistics and Programme Implementation,
Government of India and Chairman of the Delhi Group welcomed the participants
and opened the meeting. He was happy to
note that the development of informal sector statistics was high on agenda in many
countries as was evident from the participation of a number of experts in the
meeting despite the tragic events in America and its adverse impact the world
over. He gave a brief historical
background about formation of Delhi Group and the work done by it in the
past. Outlining the agenda before the
Group, he expressed the hope that the issues would be carefully analysed and
deliberated upon before arriving at suitable recommendations for future
programme of work in the field.
1.3
Agenda
The agenda of the meeting was
adopted as follows:
a)
Inaugural session
b)
Technical sessions
The issues deliberated upon in the
technical sessions were:
·
Application of the informal sector definition: treatment of persons at the
borderline between own-account workers and employees;
·
Development of criteria for the identification of persons in informal (or
precarious, non-standard etc.) employment inside and outside the informal
sector;
·
Sampling frames and designs for mixed household and enterprise surveys;
·
Evaluation of informal sector survey data and measures for quality
improvement,
·
Country Experiences and others, and
·
Future work programme
c) Adoption
of the recommendations of the meeting
d) Closing
of the meeting
Detailed
agenda of the meeting is at Annex-II.
The
meeting designated Mr. Jacques Charmes (WIEGO) as Chairperson for Session I,
Dr. N.S. Sastry as Chairperson for Session II, Mr. Ralf Hussmanns, Chairperson
for Session III and presentation of recommendations , Mr. Loh Meng Kow,
Chairperson for Session IV and Mr. M.G. Sardana, Chairperson for Session V. The
following participants were designated as Rapporteurs: Dr. G.M. Boopathy for
Session I, Dr. Rattan Chand for Session II, Mr. P.S. Bose for Session III, Mr.
G.C. Manna for Session IV and Mr. T.V. Raman for Session V. For overall coordination, Dr. G. Raveendran
was designated as Chief Rapporteur, Mr. P.H. Khopkar for technical aspects and
Mr. A.K. Sharma for Administrative aspects.
1.4 Documentation
Sixteen papers, as listed in Annex-III, were presented
during the meeting.
2 Technical sessions
2.1
Summary Report on Session One
Topic 1: Application of the informal sector
definition: treatment of persons at the borderline between own-account workers
and enterprises.
Papers presented
(i)
Treatment of out-workers in International Classification of Status in
Employment - Loh Meng Kow, ESCAP
(ii)
Application of informal sector definition : home based workers – Suman
Bery, NCAER
(iii)
Application of the informal sector definition: Treatment of persons at the
borderline between own-account workers and employees – Jyong Lee, Bank of Korea
(iv)
Application of the informal sector definition: Treatment of persons at the
borderline between own-account workers and employees – India
The
paper by Loh Meng Kow, ESCAP discusses the issue on including ‘dependent
workers’ as a separate category at the first digit level in the International
Classification of Status in Employment (ICSE-93). It discusses the characteristics of the economic activities of
this group of workers that are quite different from other entrepreneurs in the
informal sector. The paper indicates
that ESCAP Committee on Statistics at its twelfth session considered this issue
but did not endorse the inclusion. The
Expert Group was requested to deliberate the issue, and to make a
recommendation.”
The
second paper by NCAER was based on a study “Outsourcing of manufacturing
households: subcontracted Home-based work in India,” covering three sectors
viz. agarbathi – incense sticks, bidi rolling – tobacco rolled in tendu leaf
and zardosi – gold thread embroidery on finished garments. The study revealed
that (i) outworkers carried out their activities as secondary activities (ii)
shifting between status of worker: same worker could be own account/self
employed at one point of time and sub-contracted at another and (iii) the existence of ‘centres’ – a place
where workers come together to work under the supervision of a sub-contractor
(not the work places of employers). Home based workers were found to shift
between work at home and work in such centres depending on availability of
work.
The
paper by Mr. Jyong Lee of Bank of Korea emphasised the need for clearly
defining the self-employed worker and out worker and conducting specific
surveys on self-employed workers.
India’s
paper brought out the procedure followed in the categorisation of certain
economic activities performed by individuals which were in the borderline of
enterprises based on possession of productive assets and entrepreneurial
activity, in the first ever national survey on informal sector carried out
during 1999-2000.
After
considerable discussion, the Group observed that it may be difficult to
identify the dependent home-workers and these workers can form part of all
categories of employment. Depending upon their employment relationships and
types of contracts, home workers can be found in any category of status in
employment. Home-workers should therefore, be identified through the variable
“place of work” in conjunction with existing other variables, rather than as a
separate category of status in employment.
In order to define the criteria for the
distinction between independent and dependent home-workers, as well as between
own-account workers and employees in general, questions on the type of
contractual arrangements may be included in surveys. Such questions are likely
to provide better results than a self-assessment of status in employment by
respondents.
2.2
Summary Report on Session Two
Topic 2: Development of criteria for the identification of
persons in informal employment inside and outside the informal sector.
Papers presented
(i)
Informal Sector and Informal Employment; Elements of a conceptual
framework – Ralf Hussmanns, ILO.
(ii)
Employment in the Informal Sector and Informal Employment: New Insights
from Recent Surveys in India, Kenya and Tunisia – Jacques Charmes & Jeemol
Unni, WIEGO
(iii)
The Mexican Experience: Why Employment in the Informal Sector and
Vulnerable employment should not be deemed as one and the same – Rodrigo
Negrete, INEGI
(iv)
Casual Employment in Australia, Zia Abbasi, ABS, Australia (Read in
absentia).
(v)
Unorganised Sector – T.C. Girotra, National Commission on Labour, India.
The paper by Ralf Hussmanns presented
elements of a conceptual framework and definitions that would make it possible
to complement statistical measures of Informal Sector or employment in the
Informal Sector with Statistical measures of Informal Employment. The paper suggested that both these measures
are useful for analytical purposes but the two concepts need to be defined in
such a way that one can be clearly distinguished from the other.
The paper by Jacques Charmes and Jeemol
Unni attempted measurement of employment in the informal sector and of Informal
employment in India, Kenya and Tunisia.
The combined use of the residual method and direct survey method has
been used in this study, which may be a step toward a better understanding of
informal employment in its wide sense.
The paper by Rodrigo Negrete presented the
Mexican experience and emphasised that people working under informal labour
relationship are part of a phenomenon that goes far beyond the mere employment
linked to the informal sector.
The paper by Zia Abbasi mainly presented
the results of the ‘Survey of Employment arrangements and Superannuation’
conducted during April – June, 2000 and analysed the results in the context of
casual employment in Australia
The last paper by Mr. T.C. Girotra
presented problems and characteristics of the workers that can be used to
identify the Informal Sector workers from the point of view of Indian Labour
Commission. He also stressed the need
for reliable statistics on the subject.
The issues relating to measurement of
Informal Employment were discussed in detail by the Group. The Group observed that the proposed
framework (by Ralf Hussmanns, ILO) for measurement of informal employment has
been exposed for the first time before any international Group and it has not
yet been tested in the context of any country.
It was a generally felt that the concept of Informal Employment and its
measurement was useful and necessary for use in Labour Force Surveys. The proposed framework was however, required
to be tested at least in some countries before the same was recommended for
adoption by all the countries. It was,
therefore, recommended that the members of the Delhi Group, as well as other
countries, must be encouraged to test on the basis of available data the
conceptual framework developed by ILO for relating the measurement of
employment in the informal sector to the measurement of informal employment
within a labour force framework. Experiences should be reported to the next
meeting of the Delhi Group to evolve an operational definition of informal
employment and measurement methods for the same.
2.3
Summary Report on Session Three
Topic 3: Sampling
frames and designs for mixed household and enterprise surveys
Paper presented
There
was only one Paper in the Session prepared and presented by the Indian National
Sample Survey Organisation. The paper
entitled “Sampling Frames and Designs for Mixed Household and Enterprise
Surveys” gave an overview of the Indian Informal Sector Survey carried out in
NSS 55th Round (1999-2000). It
discussed the approaches available for data collection on informal sector as
recommended in the 15th ICLS (1993). It
also highlighted in detail the Sampling Frames and Sampling Designs adopted for
the Enterprise Surveys in the NSS. It
was followed by highlighting of the salient features of the Sampling Design
adopted in the NSS 55th Round. Finally,
the paper suggested that steps like separate survey of bigger enterprises,
adoption of panel surveys for obtaining better estimate of change over time and
creation of public awareness for furnishing correct information, would improve
the reliability of enterprise survey estimates in the coming years.
The
participants appreciated the paper as it provided a detailed and systematic
description of the survey methodology.
2.4: Summary Report
on Session Four
Topic 4: Evaluation
of informal sector survey data and measures for quality improvement.
Paper presented
Evaluation of Informal Sector Survey Results: The
Indian Experience ‑ India
The
paper compared the informal sector survey results of NSS 55th Round (1999-2000)
with the estimates available from alternate sources. As a part of external
validation, estimated number of enterprises- both own-account enterprises
(OAEs) and establishments, as well as estimated number of workers in OAEs and
establishments based on NSS 55th Round were compared with the corresponding
figures available from fourth Economic Census (EC 1998). For internal
validation, alternate estimates of number of workers according to enterprise
survey approach (schedule 2.0) and household survey approach (schedule 10) as
per the NSS 55th Round were compared. There were differences in coverage of
enterprises in the NSS 55th Round and EC-98- the coverage of the latter being
much wider than the former, as the EC- 98 covered incorporated units also. But,
still it is seen that estimated number of OAEs and estimated number of workers
in OAEs based on NSS 55th Round were substantially higher than the
corresponding figures based on EC-98. In the case of establishments, the EC
estimates were higher due to coverage difference. The paper demonstrated that
estimated number of workers based on schedule 10 was generally higher than the
corresponding estimates based on schedule 2.0 for almost all activities.
While
discussing the paper after the presentation, many participants felt that there
was a need to undertake detailed studies on the topic for more meaningful
comparisons by utilising unit level data.
While doing so, information on type of ownership of the enterprises in
EC-98, activity type of workers of the sample households, etc. could be taken
into account for comparing alternate estimates relating to the same
categories. It was felt that such
studies could be carried out by possibly drawing the required financial support
from concerned international agencies.
2.5 Summary Report on Session Five
The paper on Nepal started with
the recognition that in the absence of comprehensive statistical information
concerning economic activities of the entire population, it became very
difficult to estimate the extent of value addition made and the employment
opportunities generated in Nepal outside the formal sector. The paper then described the difficulties
experienced by Nepal in adopting and implementing the international practices while attempting to get a realistic
and quantitative measure of the informal sector in that country. The paper
includes a presentation as well as some interpretations and inferences drawn
from the results flowing from (1) Nepal –Living Standard Survey (1996) and (2)
Nepal- Labour Force Survey (NLFS). The
paper further emphasised the need for the CBS, Nepal to conduct “informal
sector surveys” capable of providing
more detailed information on the informal sector than those available from the
labour force surveys. While mentioning that the 2001 census of population in
Nepal had included, inter-alia, a question as to whether the households covered
were engaged in small scale economic activities other than agriculture, it
concluded that ad-hoc employment surveys conducted in Nepal could not reveal
the employment trends in that country, rendering them in the process to be of
limited use in regard to policy formulation.
The paper by Loh Meng Kow of ESCAP listed a number of
characteristics for the identification of informal sector units as it would be
difficult to define the sector. Quoting the experience of India in conducting
comprehensive nation-wide survey on non-agricultural enterprises during
1999-2000, the paper points out that a household cum enterprise survey approach
would be feasible for collecting data on informal sector enterprises. The paper
further states that the size of workers employed for the production of economic
activities (excluding the case of own-account workers involved in the new
economy) may provide an indirect and yet good way to determine the income
generating capacity of enterprises and for identifying trends in the incidence
of poverty. The paper concludes by raising the critical issue of linking the
surveys on informal sector to monitoring the incidence of poverty.
The
paper by Rusman Heriawan and Hanato Sigit brought out the experience of
Indonesia in the development of Informal Sector Statistics. It is stated that the concept and definition
of informal sector are still not clear in the country and thus the development
and improvement of informal sector statistics are adversely affected. The paper
further mentions that in the Indonesian context, there were several surveys
relating to informal sector, using both the establishment approach and the
household approach. A detailed account of some of these surveys is provided in
the paper. It also highlights the fact
that informal establishments are not easy to define and identify owing to
differences in the types of such establishments existing in different sectors
of the economy. The problems and complications involved in capturing the
informal sector also vary from sector to sector. The paper further provides an indicative picture of important
informal sector survey results pertaining to Indonesia. The paper concludes
that the concept and definition of the informal sector having still not been
uniformly agreed upon, the development of data collection activities in the
informal sector has certainly been suffering. It also mentions that due to the
very nature of informal sector, the measurement of activities in the informal
sector is by no means an easy task. Further, the high degree of irregularities
and differences marking the informal sector renders the task of making precise
estimates for the various important characteristics of this sector rather
difficult one.
The
highly important role being played by the Informal Sector in the Thai economy
is indicated in the paper from Thailand.
It mentions that the following surveys in Thailand taken together and
connected appropriately, can provide a useful picture of the
status of informal sector in
Thailand:
(a)
The Labour Force Survey (LFS);
(b)
The Homework Survey and
(c)
The Household Manufacturing Industry Survey.
The paper provides a fairly detailed
insight into various aspects of the aforementioned surveys conducted in
Thailand. It also mentions, in particular, about the advantages of and
limitations in using the data flowing from the above mentioned surveys. The
paper concludes with an indication/suggestion with regard to the possible
strategy which can be considered and adopted in future for being able to
capture better, under the prevailing resource constraints, the nature and
extent/dimensions of the informal sector in Thailand.
The
paper by India described the concepts being followed in conducting the surveys
on un-organised sectors and the salient features of the first ever informal
sector survey conducted in India by the National Sample Survey Organisation
(NSSO) during the period July 1999-June, 2000. This, in fact, was an integrated
survey of households and enterprises. All unincorporated proprietary and
partnership enterprises in the non-agricultural sector were covered under the
survey, as “informal sector enterprises.”
Both the household approach through labour force survey and enterprise
approach through informal sector survey were employed for the measurement of
employment in the informal sector. The
paper gives a vivid description of the survey methodology and findings. Some of
the operational difficulties encountered in the conduct of the survey and the
conclusions drawn from the experiences are also mentioned in the paper.
All
the aforementioned five papers were discussed in detail and it was noted that
for India, it would be possible to establish a relationship between incidence
of poverty and employment in the informal sector based on 55th Round
NSSO survey. It was, however, recognised that poverty can exist at widely
varying levels and need not necessarily be manifested amongst informal sector
workers. Thus under the given
situation, it would be too early to attempt any detailed enquiries connecting
incidence of poverty with employment in the Informal Sector.
3.
Future work programme:
The future programmes of work of Delhi
Group was discussed in detail and a consensus was reached on the following:
(i) future work of the Delhi Group should concentrate on a project to
establish a common pool of data for which financial support will be sought from
donor agencies, (ii) Members of the Delhi Group should assist the secretariat
of the Group in formulating a project proposal (iii) the Delhi Group will seek
the institutional support of the UN Regional Commissions (iv) review will be
made to assess how far the objectives set in the terms of reference of Delhi
Group have been achieved and (v) the website of the Delhi Group should be used
as an electronic discussion forum to enable more countries to participate in
the deliberations of the Group.
4 Recommendations
1 Depending upon their employment
relationships and types of contracts, home workers can be found in any category
of status in employment. Home-workers should therefore, be identified through
the variable “place of work” in conjunction with existing other
classifications, such as industrial and occupational classifications, rather
than as a separate category of status in employment.
2. In order to define the criteria for the
distinction between independent and dependent home-workers, as well as between
own-account workers and employees in general, questions on the type of
contractual arrangements should be used in surveys. Such questions provide
better results than a mere self-assessment by respondents of status in
employment.
3. The concept of informal employment is
distinct from the concept of employment in the informal sector. Informal
employment (to be defined in terms of characteristics of jobs) extends from the
informal sector (defined in terms of characteristics of enterprises) to other
sectors. The definition and measurement
of employment in the informal sector need to be complimented with a definition
and measurement of informal employment. Members of the Delhi Group, as well as
other countries, are encouraged to test on the basis of available data the
conceptual framework developed by the ILO for relating the measurement of
employment in the informal sector to the measurement of informal employment
within a labour force framework. Experiences should be reported in the next
meeting of the Delhi Group to help evolve an operational definition of informal
employment and measurement methods of the same. India and Mexico agreed to the request to provide the data support
for testing the framework.
4. For developing a programme of
statistics in the informal sector, the parallel use of several methods (in
particular, household surveys and mixed household and enterprise surveys) is
re-iterated. The methods used should be documented in sufficient detail, so
that data obtained from different sources can be compared and the differences,
if any, explained.
5. Data on the informal sector should be
collected at sufficiently frequent intervals, so that time series can be obtained
that make it possible to monitor trends and developments.
6. Future work of the Delhi Group should
concentrate on a project to establish a common pool of data bases on the
informal sector (along similar lines as the Luxemburg Income Study), for which
financial support will be sought from donor agencies. The aim of the project is
to undertake the necessary work in order to obtain the best possible
internationally comparable statistics of the informal sector. The project will
therefore, include studies aimed to improve the quality of existing informal
sector data, and the formulation of technical guidelines regarding the
statistics to be included and how to develop them, including the formulation of
questions for the identification in labour force surveys of informal sector
workers on a regular basis. The external funding of the project may also lead
to increased country representation in the Delhi Group.
7. Members of the Delhi Group are invited to
assist the secretariat of the Group in formulating a project proposal within
the next three months and submitting it to donor agencies.
8. The Chair of the Delhi Group will seek the
institutional support of the UN Regional Commissions in order to address the
Heads of National Statistical agencies in providing cooperation for
accomplishing the aims of this project and to designate a contact person for
the above mentioned purposes.
9. Review may be made as to how far the
objectives set in the terms of reference of Delhi Group have been achieved.
10. The website of the Delhi Group should be
used as an electronic discussion forum to enable more countries to participate
in the deliberations of the Group.
11 Procedures should be established for
linking informal sector data obtained from existing sources (labour force
surveys, mixed household surveys and enterprise surveys, economic census) with
other sources (like household income & expenditure, consumer expenditure
surveys, etc.)in support of the work of national accountants and for analysing
the relationship of the informal sector with other topics like poverty.
The session was concluded with an vote of
thanks by Dr. N. S. Sastry, DG & CEO, NSSO. The Chairman of the Group Shri
K.V. Irniraya then, formally closed the meeting.