Statistics on the Informal Economy

Transcription

1 Expert Group Meeting on Statistics for SDGs: Accounting for Informal Sector in National Accounts Statistics on the Informal Economy Yacouba Diallo ILO Regional Office for Africa Addis Ababa, Ethiopia 1

2 Contents Relevance & uses Concepts & Definitions Components Statistical standards Impact of the 19 th ICLS 2

3 Informality: Relevance Employment not recognized or protected under the legal and regulatory frameworks Decent work deficits High degree of vulnerability Receive little or no legal or social protection Unable to enforce contracts or have security of property rights Limited representation or voice Limited access to public infrastructure and benefits Important source of employment in many settings Contributes to production and livelihoods 3

4 Informality: Data uses Measure, monitor and inform development of policies Contribution to production (GDP) Small enterprise development Employment creation Promotion of decent work (full and productive employment) Development and application of labour standards Implementation of social protection floors Poverty reduction ILO Department of Statistics 4

5 Concepts & Definitions The ILO has been the leading agency in addressing the informal economy over many decades ILCs: 1972, coining of the term «informal sector» after Employment mission to Kenya 1991 the dilemna of the informal sector ILC discussions 2002 ILC: A broader conception of the scale and dimensions of informality, with the new term «informal economy» A standard setting item on transitions to formality 5

6 The informal economy The informal economy has never been defined for statistical purposes This concept has been defined for legal purposes By the International Labour Conference (ILC) in 2002, in a Resolution concerning decent work and the informal economy By the International Labour Conference in 2015 in its Recommendation concerning the Transition from the informal to the formal economy ILO Department of Statistics 6

7 Recommendation concerning the transition from the informal to the formal economy (No. 204) Objective: to provide guidelines to countries in order to Facilitate the transition of workers and economic units from the informal to the formal economy, while respecting workers fundamental rights and ensuring opportunities for income security, livelihoods and entrepreneurship Promote the creation, preservation and sustainability of decent jobs in the formal economy and the coherence of macroeconomic, employment, social protection and other social policies Prevent the informalization of formal economy jobs ( 1), adopted by the International Labour Conference in June NO::P12100_ILO_CODE:R204 ILO Department of Statistics 7

8 Legal concept of the informal economy Recommendation No. 204 The concept informal economy (a) Refers to all economic activities by workers and economic units that are in law or in practice not covered or insufficiently covered by formal arrangements (b) Does not cover illicit activities ( 2) Economic activities insufficiently covered by formal arrangements: by economic units : workers in informal economic units (informal sector) by workers : workers with informal jobs (informal employment) ILO Department of Statistics 8

9 The recommendation expects statistics to be collected This recommendation requires that statistics be collected In consultation with workers and employers organizations On a regular basis ( 37) What statistics? The number of economic units in the informal economy The number of workers in the informal economy By sex, age, place of work, and other socio-economic characteristics ( 36) ILO Department of Statistics 9

10 Employment in the informal economy Components Two components (2 statistical units): Employment in informal sector enterprises (Informal sector employment) Employment in informal jobs (Informal employment) Informal jobs outside of IS Informal sector Informal employment employment Formal jobs in IS enterprises* Two different aspects of informalization of employment Important to keep separate as often require different policies Employment in the Informal Economy: = Informal sector employment + informal employment outside of Informal Sector 10

11 International statistical standards Resolution concerning statistics of employment in the informal sector (15 th ICLS, 1993) Guidelines concerning a statistical definition of informal employment (17 th ICLS, 2003) Additional resources: Measuring informality: A statistical manual (ILO, 2013) ILO Department of Statistics 11

12 Informal sector employment Definition -15 th ICLS (1993) Persons who, in a reference period, were employed in at least one informal sector enterprise, regardless of status in employment and whether it was their main or second job Hence, all jobs in informal sector enterprises Requires operational definition of informal sector enterprise 12

13 sector enterprises (Criteria to define informal, 15th ICLS): Criterion Purpose 1. Legal organization: enterprise not constituted as a legal entity separate from its owner(s) 2. Ownership: enterprise owned and controlled by member(s) of household(s) 3. Type of accounts: no complete set of accounts including balance sheets Identification of unincorporated enterprises Identification of household unincorporated enterprises Exclusion of quasi-corporations from household unincorporated enterprises 4. Product destination: at least some market output Identification of household unincorporated market enterprises Exclusion of hholds. producing goods for own final use 5. Kind of economic activity Exclusion of households employing paid domestic workers; possible exclusion of enterprises engaged in agricultural and related activities 6.1 Number of persons engaged/ employees working on a continuous basis: less than n AND/OR 6.2 Non-registration of the enterprise AND/OR 6.3 Non-registration of the employees or the enterprise Identification of informal sector enterprises as a subset of household unincorporated market enterprises

14 Need for complementary job perspective Informal sector employment definition excludes Jobs in households and in formal enterprises not protected under the legal and regulatory frameworks Casual, temporary (non-standard, atypical, precarious) employees in formal enterprises Paid domestic workers in private households ILO Department of Statistics 14

15 Informal employment Definition -17 th ICLS (2003) Total number of informal jobs, whether carried out in formal sector enterprises, informal sector enterprises or households, during a given reference period Informal jobs Operational definition depends on status in employment 15

16 Impact of the 19 th ICLS on statistics on the Informal Economy The international definitions of the informal sector and of informal employment were adopted in 1993 and 2003 They were meant to cover all employed persons; and Exclude all workers outside of employment The relevant concept of employment at the time was adopted in 1982 by the 13th ICLS Employment included all persons who produced goods and services which were included within the SNA In 2013 a new definition of employment was adopted which narrowed the scope of employment To persons who work for pay or profit ILO Department of Statistics 16

17 Work New statistical definition (I) Any activity performed by persons of any sex and age to produce goods or provide services for use by others or for own use Para 6,Resol I. (19 th ICLS, 2013) Concept for reference purposes Not for direct measurement! Recognizes all productive activities as work But WORK Employment ILO Department of Statistics 17

18 Work New statistical definition (II) Aligned with General production boundary (2008 SNA) Must fulfill third person criterion Must result in production of goods or services Can be performed in any kind of economic unit Market units (i.e. for profit units, such as corporations, quasi-corporations and household unincorporated market enterprises) Non-market units (i.e. government & non-profit institutions) Households producing goods or services for own final use Irrespective of formal, informal nature or legality of activity Enables coherence between work statistics and economic statistics ILO Department of Statistics 18

19 Forms of Work Framework (I) Classification of productive activities (not of people!) ILO Department of Statistics 19

20 Forms of work framework (II) Distinguishes different types of work (i.e. productive activities) Main intended destination of production (own final use / use by others) Type of transaction (for remuneration / without remuneration) Enables their separate measurement in full Supports more targeted monitoring to inform policymaking Permits coherence with national accounts National production & satellite accounts ILO Department of Statistics 20

21 Correspondence with previous standards and with national practice Previous scope of economic activity used to define the employed In general countries use narrower scope to identify the employed ILO Department of Statistics 21

22 Relevance for Labour force statistics Reference concept for Labour force statistics Employment definition refined as work for pay or profit Narrower employment definition to serve as basis for labour force statistics Other forms of work to be measured separately ILO Department of Statistics 22

23 Usefulness of new framework 1. Multiple activities of Persons 2. Household allocation of labour, contribution to livelihoods 3. Assessment of labour market participation & integration by persons in forms of work other than employment ILO Department of Statistics 23

24 Impact of the 19 th ICLS on statistics on the Informal Economy Three approaches are possible: To reduce the scope of the informal economy to the new definition of employment (work for pay or profit) To maintain the scope of the informal economy to the old definition of employment To expand the scope of the informal economy to all forms of work ILO Department of Statistics 24

25 Towards a broader framework of Work in the Informal Economy The informal economy would increase If we measure all forms of work The scope would depend on national priorities Statistics would be reported separately by forms of work Most comparable between countries It would require that ICSE also covers all forms of work And that it creates groups for workers for which currently no explicit status in employment exists (e.g., direct volunteers, unpaid trainees, volunteers through organizations, workers in other forms of work) Terminology would need to change Informal work, work in the informal sector, work in the informal economy ILO Department of Statistics 25

26 Towards a broader framework of Work in the Informal Economy Need to consider informality in ALL forms of work, not only in employment Unpaid trainee workers Volunteer workers in market units Volunteer workers in non-market units Volunteer workers in households Own-use producers of goods Own-use providers of services ILO Department of Statistics 26