INFORMAL
SECTOR STATISTICS
(DELHI
GROUP)
1. Organisation of the meeting
The
Sixth Meeting of the Expert Group on Informal Sector Statistics (Delhi Group)
was hosted by the Brazilian Institute of Geography and Statistics (IBGE), Rio
de Janeiro, Brazil during the period 16-18 September, 2002.
2. Participation
The
meeting was attended by six countries, viz Argentina, Brazil, Cuba, Fiji, India
and Venezuela, the International Labour Organisation (ILO) and Women in
Informal Employment: Globalising and Organising (WIEGO). Though the countries
of Peru and Zambia indicated their participation, they could not make it to the
meeting. The list of participants is at Annex I.
3. Inauguration
The
inaugural session of the meeting was chaired by Mr. K.K. Jaswal, Secretary,
Ministry of Statistics & Programme Implementation as Chairman of the Delhi
Group and was inaugurated by Mr. Sergio Besserman Vianna, President of the
IBGE. In his opening remarks, the
Chairman gave a brief account of the milestones covered so far by the Group and
the challenges ahead. Mr. Sergio
Besserman Vianna, in his inaugural address highlighted the importance of the
informal sector in the Brazilian economy, the statistical challenges in its
measurement and the need for building up time series data on informal
sector. He also mentioned that City
Groups have become important forums to put forward new ideas to improve
statistical methods and in contributing to the development of international
standards.
4. Agenda
The agenda
adopted for the meeting consisted of the following sessions:
(i)
Inaugural Session.
(ii)
Technical Session I: Case studies on the operationalisation
of the concept of 'Informal Employment' as distinct from 'Informal Sector Employment'.
(iii)
Technical Session II: Linkages of informal sector statistics
with income and expenditure and poverty statistics.
(iv)
Technical Session III: Establishment of comparable data sets
on informal sector.
(v)
Technical Session IV: Methods and procedures for the
collection of informal sector statistics on a regular basis including
preparation of a manual.
(vi)
Technical Session V: Discussions on future programme of
work.
(vii)
Concluding Session.
The
detailed agenda of the meeting is at Annex –II.
5. Summary
of the deliberations and recommendations
The first
session of the meeting was devoted to presentation of case studies on the
operationalisation of the concept of
'Informal Employment' as distinct from 'Informal Sector Employment'. The
following papers were presented in the session:
1.
A labour force survey module on informal employment, (including
employment in the informal sector) as a tool for enhancing the international
comparability of data (Part-I)- Ralf Hussmanns, ILO
2.
Testing the conceptual frame work of informal employment - A
case study of India - Dr. G. Raveendran, India
3.
The concepts of informal sector and informal employment,:
An application for Brazil - Angela Filgueiras Jorge and Lucilia Valadao, IBGE
4.
Analysis linking data on work in informal employment and
poverty: Case study of India -Dr. N.S. Sastry, WIEGO
5.
Operationalisation from the point of view of the policy
maker - Lourdes Ferran, Venezuela.
The
session started with a brief presentation of the conceptual framework of
informal employment, which is a broader concept than employment in the informal
sector, by Ralf Hussmanns, ILO. He mentioned that an international statistical
definition of informal employment is yet not available though informal
employment exists in different forms like unregulated employment, unprotected
employment precarious employment, etc. In order to arrive at such a definition,
the approach suggested by the ILO for defining informal employment needs to be
tested and evolved on the basis of country experiences and methodological
studies. He announced that the 17th
International Conference of Labour Statisticians, to be held in Geneva in
November/December 2003, would discuss the issue of measuring informal
employment.
The paper
by Dr. G. Raveendran, India presented the distribution of employment over
formal and informal in the conceptual framework of the ILO based on the labour
force survey conducted in India during July 1999 to June 2000. The paper
concluded that it would be possible to estimate the magnitude of informal employment
through labour force surveys by a suitable modification of the survey
schedules. It would be, however, difficult to identify the single-most
distinctive feature of informal employment in each country. Thus a fully
harmonized definition of informal employment may not be possible in the present
context.
The paper
by A. Filgueiras Jorge and Lucilia Valadao of Brazil presented experiences of
Brazil in constructing the ILO conceptual framework of informal employment. It
was concluded that it was possible to estimate the informal employment
generated in the Brazilian economy through the exercise. The paper by Rodrigo
Negrete, Mexico was presented by Ralf Hussmanns as Mr.Rodrigo could not attend
the meeting. In his paper, Mr. Rodrigo has argued that in Mexico agriculture
needs to be treated separately for the measurement of both employment in the
informal sector and informal employment. He has also mentioned that specialized
surveys would not be needed for the estimation of informal employment with some
modifications in the labour force surveys questionnaires, it would be
possible to construct the ILO framework of informal employment though quality
issues need to be addressed. He has also suggested that use of the term
'informal employment' in parallel with ‘informal sector employment’ is likely
to create confusion and that therefore, it would be preferable to change
‘informal employment’ to 'non-protected employment'.
The paper
from the National Council of Applied Economic Research, India was presented by
Dr. G. Raveendran in the absence of any representative from the Council. The
paper covered four case studies undertaken by the Council to identify informal
employment. The case studies have brought out interesting results about women’s
work force. However, the studies are not according to any framework or
statistical procedures.
The Group recognized the need for consolidating the country experiences
and undertaking further research for evolving a statistical definition of 'informal employment' and methods of
compiling informal employment statistics through labour force surveys.
The
second session was devoted to ‘Linkages of Informal Sector Statistics with
Income and Expenditure and Poverty Statistics'. The following papers were presented:
(i) Analysis of linking data on work in
informal employment and poverty: Case study
of India - Dr. N.S. Sastry, WIEGO
(ii)
Operationalisation from the point of view of the policy
maker Lourdes Ferran, Venezuela
(iii)
Rethinking informal economy in Rio de Janeiro slums - Denise Britz do Nascimento Silva, IBGE,
Brazil
The
linkage between 'employment in informal sector', 'poverty' and 'gender' in the
case of India was analysed in the paper by Dr. N.S. Sastry by making use of the
unit level data relating to the 'Labour Force Survey' conducted by the National
Sample Survey Organisation (NSSO) of India during July 1999 to June 2000. At
the first instance, a sub-set of households defined as "households
sustaining on employment in informal sector" was identified by using the
criterion that 'at least one usual principal status worker of the household is
in the informal sector and no usual principal status worker outside the
informal sector'.
The
linkages of these households and some of their further sub-sets to poverty were
analysed by using the data available on consumption expenditure on an abridged
format after making adjustments for under-estimation. The important findings
were:
(i)
The poverty situation of 'households sustaining on
employment in informal sector' was worse in the urban sector than in the rural
sector, whereas in the entire population, it was in the reverse order both in
the case of urban and rural sectors.
(ii)
In rural India, as compared to the entire population, lower
levels of poverty were observed among the persons belonging to households which
sustained on (a) employment in informal sector, (b) self-employment in informal
sector, (c) employment in informal sector and were headed by females, and
(d) employment in informal sector with only one male usual principal status
worker. However, higher poverty levels were observed amongst the households
which sustained on (a) employment in informal sector with either only a female
usual principal status worker or with one male and one female usual principal
status worker, (b) employment in informal sector with no literate member
and, (c) employment in informal sector
with no literate female member.
(iii) In urban India, compared to the poverty
estimate in the general population, poverty was at nearly the same or lower
levels among persons belonging to households which sustained on (a) self
employment in informal sector, (b) regular salary/wage employment in informal
sector, and (c) employment in informal sector with only one male usual
principal status worker. The incidence of poverty in the case of all other
categories of households sustaining on employment in informal sector was higher
as compared to the general population.
The group
appreciated the study and suggested that further research should be carried out
to identify the causes of variations in the poverty situation of urban and
rural households sustaining on employment in informal sector, its
inter-relationship with competition from the formal sector, capital endowment
and technology adoption, the relevance of the sector as a poverty alleviation
strategy and above all the policy implications of the findings. 'It was also
suggested to study the poverty situation of households with different members
pursuing different informal sector activities as against those households with
all the workers pursing the same informal sector activity.
The
paper by Lourdes Ferran on "Operationalisation from the point of view of
the policy-maker "provided a critical assessment of the existing
statistics, concepts and classifications on informal sector in relation to the
requirements of policy-makers. She mentioned that the problems of informal
workers are problems caused by poverty and, therefore, the statistics of the
sector should bring out a clear picture of the sector, in order to be able to
provide measures for the improvement of social security issues like health
policies, development policies like absorption of underemployed persons into
formal activities, trade union policies, welfare and occupational policies,
etc. It was, therefore, argued that statistical activities relating to informal
sector should be more oriented towards these directions.
It
was pointed out during the discussions that there can be both policy-related
statistical activities as well as policies based on statistical findings, and
that statistics relating to any sector can have dimensions of environment,
social aspects and economic impacts.
The
third paper on "Rethinking informal economy in Rio de Janeiro slums"
by Denise Britz do Nascimento Silva presented the dimensions of the informal
sector in 51 slums of Rio de Janeiro. The Group noted the results of the study
with interest.
The topic "Establishment of
Comparable Data sets on Informal Sector" was discussed in the third
session and the following papers were presented.
1.
Preservation of macro-data at the national level: case study
of India- Dr. N.S.Sastry, WIEGO.
2.
A labour force survey module on informal employment,
(including employment in the informal sector) as a tool for enhancing the
international comparability of data (Part II) - Ralf Hussmanns and Brigitte
du Jeu, ILO.
3.
Project proposals received from some of the countries
(presented by Dr. G. Raveendran, India).
The paper
by Dr. Sastry was in the context of the recommendation by the fifth meeting of
the Delhi Group for the establishment of a common pool of databases on informal
sector and the decisions by a WIEGO planning meeting organized at Geneva during
June 2002. The paper provided a vivid picture of various sources of data in
India like the economic census, follow-up enterprise surveys, household surveys
of un-organised units, survey of small scale industries, labour force and
informal sector surveys and the manner in which unit level data sets are being
made available for research purposes at nominal cost. The paper stressed the
importance of preservation, harmonization and synergisation of micro-data for
policy formulation as well as for developing countries to replicate the efforts
so that comparable data sets on the informal economy could be established. It
was clarified during discussions that in India, the identity of the individual
units providing data could be suppressed by removing the identification
particulars.
The paper
by Mr.Hussmanns dwelled on the problems of lack of comparability of data
collected from national sources due to various reasons including differences in
definition, coverage, methods of data collection, etc. He also mentioned the
data sets being maintained by the ILO on informal sector employment and their
limitations including the fact that no data sets are available in respect of
China. A compendium of official statistics on employment in the informal sector
prepared by the ILO based on the statistics made available by the countries was
distributed during the meeting. Ms. du Jeu presented an analysis of the data published
in the compendium.
Mr.
Hussmanns described the numerous factors which are responsible for the lack of
comparability of data. He mentioned that even in instances, where the international
definition was followed, the flexibility in the definition may lead to
non-comparability of data sets. He also mentioned the limitations of labour
force surveys arising out of short reference periods leading to non- capturing
of seasonal variations and the difficulty in estimating the number of informal
sector enterprises. He outlined various ways for enhancing the data
comparability by harmonizing macro or micro data sets.
Harmonisation of macro data could be done through reprocessing of existing
data as well as by making model-based adjustments. Micro level data harmonizing
can be achieved by collecting data according to a uniform list of items by each
country. To this end, he proposed a
standard module of questions to be included in labour force surveys for the
identification and estimation of employment in the informal sector and informal
employment.
During the
discussions concerns were expressed about the applicability of the different
questions included in the proposed module in different countries. It was however clarified that the questions
and their response categories were meant to be merely indicative of the kind of
information needed to identify employment in the informal sector and informal
employment, and that their exact wording would have to be determined by each
country itself. It was suggested that
additional case studies should be conducted in selected countries on a regional
basis before any such module can be recommended by the Group.
The last
presentation by Dr. G.Raveendran was a summary of responses received from the
State Statistical Committee of Azerbaijan Republic, Central Statistical
Authority of Ethiopia, Statistical Centre of Iran, Central Statistical Office
of Mauritius and National Statistical Office of Thailand in response to a
communication sent to all the countries interested in the Delhi Group.
Azerbaijan's
proposal suggested confirmation of definitions and coverage, summarizing of
observations and estimation and the need to conduct a training course to improve
questionnaires for the survey. Ethiopia's proposal was to conduct an "Urban Informal Sector Survey"
during July 2002 to August 2003. Iran suggested to take advantage of the
experiences of developed countries and proposed data collection through income-expenditure
and time use surveys. Mauritius' proposal is restricted to data collection from
censuses and surveys of household and establishments, since they do not have a defined 'informal sector'.
Thailand
proposed to undertake studies by selected countries to improve the quality of
existing data and to document country experiences as had been suggested by the
ILO in previous meetings of the Delhi Group. Thailand also suggested workshops
and visits to participating countries
On the
basis of the papers presented and the discussions thereafter, the Group
reiterated the need for having comparable data sets on the informal sector and
their proper archival for use by all interested agencies.
SESSION IV
‘Methods
and procedures for the collection of informal sector statistics on a regular
basis including preparation of a manual’ was the fourth session and the
following papers were presented.
(i)
Improved statistics on the
informal economy - user needs - Martha Chen, Margarita Guerrero and Joann
Vanek, WIEGO
(ii)
A review of national surveys
and possible contents of a manual on informal sector statistics' - Dr.
G. Raveendran, India.
The first paper proposed four items for further work
to improve statistics on the informal economy viz. (a) concepts and methods to improve
data collection; (b) preparation of global and regional estimates of the size
and contribution of the informal economy; (c) policy -oriented research
reports; and (d) data archive for national data on the informal economy. The presenter also raised the issue of what
could be done to strengthen the Delhi Group, especially with a view to
increasing the participation of countries in its meetings. The Delhi Group took
note of the proposal, which would be taken into consideration while determining
the future work programme of the Group. Regarding the participation of
countries in the Delhi Group meetings, lack of funding to attend the meetings
and use of a single working language (English) were identified as the major
obstacles to increasing the country participation during the meetings. It was
agreed that efforts should be made to obtain donor funding for future meetings
of the Group, including funds for interpretation to Russian, Spanish and
French. The translation of the papers prepared for the meetings was considered
to be of lesser importance. It was recalled that participation in the Delhi
Group was open to all countries, irrespective of their level of development,
but that issues of employment statistics, which were not directly related to
the informal economy, were to be dealt with by the Paris Group.
The second paper presented a proposal for the
preparation of a comprehensive manual for the collection of internationally
comparable informal sector statistics. It was also argued in the paper that efforts
should be made to also measure informal economy through income and expenditure
surveys. During the discussion of the paper, a view was expressed that the
proposal was too ambitious and did not mention how the work could be organised
to prepare the manual. The meeting was informed that in 2002 the OECD, IMF, ILO
and Statistical Committee of the Commonwealth of Independent States had already
published jointly a handbook on 'Measuring the non-observed economy', which
dealt with the national accounting aspects of the subject in sufficient detail
and was available in English, Russian and French. The meeting was also informed
that the ILO had already started preparation of a methodological manual on
informal sector surveys. Once a complete draft of the manual was available, the
Delhi Group would be invited to devote one of its future meetings (perhaps the
meeting in 2004) to a discussion of the draft. The ILO offered to host that
meeting in Geneva.
SESSION V
Session V
was devoted to discuss the future programme of work of the Delhi Group. The
consensus in the meeting was to focus on the following:
1.
The future work of the
Delhi Group needs to be enlarged to develop methodologies for addressing policy
issues while continuing to focus on developing high quality informal sector
statistics.
2.
To ensure participation
of more countries, the assistance of funding agencies should be sought for
assisting countries, which have already undertaken informal sector surveys, to
undertake evaluations of the data quality and present the results in the next
meetings of the Delhi Group.
3.
Further studies
should be undertaken regarding the collection of data on status in employment
and precarious employment, which are closely related to the measurement of
employment in the informal sector and of informal employment. (Comment: This point was made by
Argentina and accepted by the others.)
4.
The next meeting should
focus on issues like national accounts, poverty and policy implications of the
informal sector.
5.
The ILO will host the
2004 meeting of the Delhi Group at Geneva, if a complete draft of its manual on
informal sector surveys is ready by then. In the meantime, the Delhi Group
should examine the OECD/IMF/ILO/CIS handbook on measurement of the non-observed
economy, which deals with the national accounts perspective and includes a
chapter on the informal sector.
Recommendations: