REPORT OF THE SIXTH MEETING OF THE EXPERT GROUP ON
INFORMAL SECTOR STATISTICS
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.
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.
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.
The agenda adopted for the meeting consisted of the following sessions:
The detailed agenda of the meeting is at Annex –II.
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:
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 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 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 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:
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:
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.
SESSION III:The topic "Establishment of Comparable Data sets on Informal Sector" was discussed in the third session and the following papers were presented.
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.
Azerbaijans 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. Ethiopias 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.
‘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.
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 was devoted to discuss the future programme of work of the Delhi Group. The consensus in the meeting was to focus on the following: