Informality is only a problem in developing countries

Transcription

1 Introduction Informality is only a problem in developing countries The contribution ti of the informal sector to the national production is insignificant Informality is difficult to measure Informality has two components The informal sector and informal employment are the same The informal sector refers to economic units whose objective is to create jobs and income rather than maximise profits 1 Introduction All informal sector activities are underground activities The Delhi Group is a group of experts from India Informal employment relates to persons in jobs that are not protected by labour laws Persons who are covered by social security schemes can be in informal employment Informal employment can only happen in the informal sector

2 On definitions An informal sector enterprise is a production unit operated in the owner s home All small enterprises are in the informal sector A person is in the informal sector if he/she has a precarious job Only employers are entrepreneurs A person can work in the formal sector and in the informal sector On definitions Informal sector enterprises must meet which of these criteria Are household enterprises (privately owned by one or more persons) At least some of the product is sold in the market Are not agricultural activities Should not keep full accounts Small employment size Are not registered Employees are not registered Issue for reflection: In your country, which criteria would you use to define the informal sector? 4

3 On definitions The informal sector includes/excludes: l d Units exclusively engaged in production for own final use Agricultural activities Rural areas Professionals and technicians Outworkers Paid domestic employees Informal employment can only occur in formal sector enterprises Contributing family workers are in informal employment if they do not have right to vacations Informal sector entrepreneurs are in formal employment It is not possible to work in the informal sector and have formal employment 5 On definitions Employees in informal jobs must meet which of these criteria: Are not covered by social security Are not entitled to annual leave, sick leave, maternity leave Are at risk of being dismissed without notice Are harassed by the boss Do not have a written contract Have a casual job Pay income taxes Issue for reflection: In your country, which criteria would you use to define employees with informal jobs? 6

4 On measurement methods Informality is better measured with labour force surveys It is better to use direct methods than indirect methods The most important statistics are about the number of workers in the informal sector Statistics on informality should be measured ed on a regular basis Establishment surveys are not a good source for informality statistics Indirect measures should never be used 7 On labour force surveys To measure informality with LFS... A standard sample design is good enough The questionnaire design is very important One simple question is required Training to interviewers is crucial Only the main job needs to be covered All activities, including agriculture, should be covered Can produce statistics on employment, production and number of informal units The two track approach is when there is more than one definition of informal sector or informal employment in the country 8

5 On labour force surveys Issues for reflection Did you carry out a labour force survey in your country? Did it measure informality? Was the sample selected considering density of informal workers? How many questions did you use to identify the informal sector? How many questions did you use to identify informal employment? Did you use the same questions for employees and self employed workers? Did you cover the main job only or also secondary jobs? Did you include agricultural activities? Rural areas? Did you include paid domestic workers? 9 On establishment surveys List-based establishment surveys can cover informal sector units Et Establishment blih t surveys can produce statistics titi on: Employment in the informal sector Informal employment Value added of the informal sector Number of informal sector units When the objective is to cover all economic units, formal and informal, dual frames should be used An establishment survey that covers the informal sector is based on a sample frame that covers only fixed economic units 10

6 On establishment surveys A sample frame that covers all economic units is based on an establishment census An area-based sample design selects economic units directly from the sample frame The questionnaire is crucial to collecting good data on informal sector units Many questions are needed on all the elements needed for calculating the GVA Very detailed questions are essential to be sure that the data are valid We should ask for information on sales and production about a whole year in order to be useful for national accounts We can send the questionnaire i by mail for entrepreneurs to fill it it by themselves 11 On establishment surveys Issues for reflection Have you carried out an establishment survey in your country? Was the sample based on a list-based frame or an areaframe? Did it cover all the economic units? What is the coverage of economic units? How long was the questionnaire? How detailed were the questions? What was the reference period? Did you send the questionnaires by mail or did personal interviews? How frequently was the survey carried out? Have you carried out an Establishment Census? Was it done at the same time as the Population Census? What was the coverage of economic units? 12

7 Mixed surveys Mixed surveys always start with a household survey as the first phase The sample of households h in mixed surveys is always selected considering the density of informal sector units in each enumeration area In a mixed survey, the sample unit of the first phase are households In a mixed survey the sample unit of the second phase are the economic units Some mixed surveys are the same as establishment surveys 13 Mixed surveys It is important to cover the main and secondary jobs in the first phase of a mixed survey It is possible to use dual samples in a mixed survey A sample of establishments for fixed visible units A sample of households for household-based and itinerant activities The questionnaire of mixed surveys should be detailed and long The interviews in the second phase should be carried out at the dwelling of the entrepreneur The reference period should be long 14

8 On Mixed surveys Issues for reflection Have you carried out a Mixed survey in your country? Was it a mixed modular survey or a mixed independent survey? Did it cover only informal sector units or did it cover more units than the informal sector? Which? How long was the questionnaire? How detailed were the questions? What was the reference period? Was the quality and quantity of responses affected by this? How frequently was the survey carried out? Did you use the results of this survey for national accounts? If no, why not? 15