United Nations Economic Commission for EuropeStatistical DivisionUnited Nations Economic Commission for EuropeStatistical Division

Labor Statistics: Informal Employment

UNECE Statistical Division

- UNECE Statistical Division Slide 2

Informal Employment

Definitions

Initially, the concept of the informal sector was an analytical concept for research purposes.

Now, it is being used as a statistical concept for data collection purposes, referring to activities not covered – or insufficiently covered, by the existing traditional sources of statistical data.

- UNECE Statistical Division Slide 3

Informal Employment

What does “informal” mean? The ‘informal economy’ refers to “all economic activities by workers and

economic units that are not covered or insufficiently covered by formal arrangements”

Informal sector enterprises:• Unincorporated enterprises: enterprises owned by individuals or households

that are not constituted as separated legal entities independently of their owners, and for which no complete accounts are available that would permit a financial separation of the production activities of the enterprise from the other activities of its owner

• Size is below a certain threshold (five employees?)• All or at least some of the goods or services produced are meant for sale or

barter. Market orientation • Defined by national circumstances • Lack of registration • Enterprises engaged in agriculture could be included but good to identified

them separately from the non-agriculture enterprises

- UNECE Statistical Division Slide 4

Informal Employment

How“informal” relate to employment?

There are two “informal” concepts that affect employment:

• Employment in the informal sector

• Informal employment

- UNECE Statistical Division Slide 5

Informal Employment

How does“informal” relate to employment?

Employment in the informal sector

all persons who, during a given reference period, were employed in at least one of the informal sector enterprise, irrespective of their status in employment and whether it was their main or a secondary job

 

- UNECE Statistical Division Slide 6

Informal Employment

How does“informal” relate to employment?

Informal Employment Persons employed in the informal sector + persons employed

in “informal” jobs.

Informal jobs:• non-standard, atypical, irregular, precarious,

unprotected• not covered by existing regulations (social

protection, benefits

The first criterion is based on the production unit, the second criterion on the type of job

- UNECE Statistical Division Slide 7

How does“informal” relate to employment?

Employment in the informal sector and Informal employment are concepts, which refer to different aspects of the ‘informalisation’ of employment and to different targets for policy-making. They are both useful for analytical purposes and, hence, complement each other. Statistics users and others often tend to confuse the two concepts because they are unaware of the different observation units involved: enterprises on the one had, and jobs on the other.

Informal Employment

- UNECE Statistical Division Slide 8

Total Employment

Employment in the informal sector

Informal jobs in formal enterprises and households

Informal employment

Informal Employment

- UNECE Statistical Division Slide 9

An example: Moldova 2003Employed Persons by nature of job

206880

335175

873145

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

TOTAL

informal sector enterprise informal jobs in formal sector and households Formal employment

Informal employment

Informal Employment

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Status in employment and informal employment

• Employees• Employers • Own-account workers• Contributing family workers• Members of producers’ cooperatives

Informal Employment

Self-employment

- UNECE Statistical Division Slide 11

Informal Employment

Informal Employment comprises:

Own-account workers and employers employed in their own informal sector enterprises.

Contributing family workers, irrespective of whether they work in formal or informal sector enterprises.

Employees holding informal jobs, whether employed by formal sector enterprises, informal sector enterprises, or as paid domestic workers by households.

Members of informal producers’ cooperatives. Own-account workers engaged in the production of goods

exclusively for own final use by their household (such as subsistence farming or do-it-yourself construction of own dwellings)

- UNECE Statistical Division Slide 12

Informal employment and status in employment

Own-account workers

Employers

Employees

Members ofproducers'cooperatives

Contributing familyworkers

In informal enterprises Holding informal jobs Households Formal employment

Informal Employment

- UNECE Statistical Division Slide 13

Informal Employment

Informal employment consists of a large and diverse category of workers which can be divided in to more homogenous categories according to

the status of the employment.• Informal self employment• Informal wage employment

- UNECE Statistical Division Slide 14

Informal employment and status in employment in Moldova 2003

Informal Employment

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Employees

Self-employed

informal sector enterprises households formal sector enterprises

- UNECE Statistical Division Slide 15

Gender and informal employment

• Informal employment comprises one half to three-quarters of non-agricultural employment in developing countries.

• Data disaggregated by informal and formal employment and employment status provide new information on the difference in the opportunities of women and men in the labor market:

Informal employment is generally a larger source of employment for women than formal employment

In most developing countries it is a larger source of employment for women than for men

Women are concentrated in the more precarious types of informal employment

Average earnings from these types of informal employment are low

Informal Employment

- UNECE Statistical Division Slide 16

In developed countries, informal employment exists and is growing

Examples include: • Own-account self employment,• part-time employment• temporary wage employment

including fixed term/contract, casual, seasonal and on-call work and work through a temporary agency

Informal Employment

- UNECE Statistical Division Slide 17

Informal Employment

Employed Persons by sex and nature of job, Moldova 2003

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FEMALE MALE

informal sector enterprise informal jobs in formal sector and households Formal employment

- UNECE Statistical Division Slide 18

Increasing importance in countries in transition

• Previously, informal activities were illegal

and even forbidden.• Now these activities have an increasing role

in creating jobs, providing income, and producing goods and services.

Informal Employment

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Informal Employment

0

0.2

0.4

0.6

0.8

1

1.2

Male Female Male Female Male Female

Agriculture Industry Trade, hotels

Formal employment Informal employment

Share of formal and informal employment by sex and industry, Moldova 2003

- UNECE Statistical Division Slide 20

Issues in data collection and dissemination

Data collected through the Labor Force Surveys can be used to address informal sector and informal employment through a special module• If questions on the size of the enterprise

and whether the enterprise is registered are asked, then statistics on employment in the informal sector can be prepared.

• Additional questions on the nature of the job can identify informal jobs

Informal Employment

- UNECE Statistical Division Slide 21

Thank you !