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.
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.
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.
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.
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)
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:
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.
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.
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.
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.
The paper proposes a definition of "employment in the informal economy" as follows:
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
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.
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.
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.
- 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)
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.
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.
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.
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.
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.
At the end of the meeting, the Delhi Group adopted the following recommendations:
- 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.