Informal Sector Statistics Nepal Informal Sector Statistics Informal Sector Statistics Training Bangkok, Thailand | 14-15 November 2017

Outline of presentation Definition of informal sector Status of the informal sector in your country Country policies for informal sector Current statistics being produced What data sources do you collect? National Accounts and the informal sector Country specific issues in statistics Development plans How development partners can help

Definitions of informal sector Policy perspective Not officially defined Mainstreaming of informal sector in formal sector (mentioned in the Current 14th three years’ periodic plan and annual budget speech) Promulgated the new Labor Act 2017. (The act has changed the definition of establishment but not explicitly defined the informal sector)

Definitions of informal sector (contd.) Statistical definition CBS adopt the definition of informal sector as per the ILO guideline Employment in the informal sector (Nepal LFS 1998 & 2008 – 15th ICLS, LFS 2017 on going – 19th ICLS) Definition of informal sector limited to non-agricultural sectors only

Status of informal sector statistics % of GDP: Not yet declared officially % of labour force (2008, LFS) currently employed in - agriculture sector : 73.9 - non-agricultural formal sector : 7.9 - non-agricultural informal sector : 18.2 SDG 8 & 10 – indicator status: Not yet published

Informal sector country policies 14th three years’ periodic plan (2016/17-2018/19) Registration of informal sector labor and their accidental insurance Intended to expand the social insurance and micro finance in the informal sector as well Implement effective legal provisions in controlling the non- observed activities (like black market, monopoly market, informal business activities)

Informal sector country policies (contd.) Budget Speech Mainstreaming informal economic activities in formal sector to capture large volume of economy that is out of formal sector

Informal sector country policies (contd.) National Employment Policy 2014 Developed by Ministry of Labor and Employment The policy has aimed transforming the informal employment to the formal employment to improve the quality of employment in the country A nine-point policies has been stated like providing appropriate professional or entrepreneurship trainings, ensuring the social security of informal employment to achieve this objective

Data sources Does NOT EXIST Informal Sector focused survey Data on informal sector has been supplied from various sources: Labor Force Survey (1998, 2008, 2017 on going) (two stage cluster sampling design, supposed to conduct in every 5 years)

Data sources (contd.) Living Standards Measurement Survey (1995, 2003, 2011, 2018- planned) (two stage cluster sample design, supposed to conduct in every 5 years) Population Census (every 10 years, next round 2021) Planned - Economic Census in 2018

How is the informal sector included in the national accounts of Nepal Main data source: LSMS LFS Annual Household Survey Population Census Agriculture Census Census of Manufacturing Establishment MPPI & Administrative data of concern ministries/departments.

How is the informal sector included in the national accounts of Nepal Determining the informal activity: Volume extrapolation, Household growth rate MPPI, Commodity Flow Approach (Trade) Registration Status Hired Status Yes No Formal Informal

Issues Issues need to resolve Weak research practices on informal sector Measurement of national account is still imperfect due to the absence of structural data on informal sector such as input, output, intermediate consumption, capital formation etc. non-existence of an updated SBR, EC and regular household survey focusing on informal sector

Issues (contd.) Policy issues Adopt international concept, definition and classification on informal sector of economy in national legislations and policies Define accountability of data suppliers in the relevant policies Develop Statistical Business Register

Issues (contd.) SDG indicators for goal 8 (Informal employment, Av. hourly earnings) No regular survey except LSMS, LFS Disaggregated data demands for larger sample size SDG indicators for goal 10 (Labor share of GDP) Data not available

Development plans for NSO Plans to develop and enhance informal sector statistics Establish network of experts for measuring informal economies Develop the standard concept, definition and methodologies on informal sector statistics Identify constraints and prepare strategies for developing informal sector statistics

Development plans for NSO (contd.) Plans to develop and enhance informal sector statistics (contd.) Develop technical capacity on informal sector statistics and in preparing informal accounts Conduct economic census regularly and establish SBR

Development partners How development partners can help Technical Assistance Assist in policy development on informal sector statistics for the country Develop the standard concept, definition and methodologies on informal statistics Identify the possible regular data sources Develop technical capacity on informal sector statistics through training, workshop, seminar

Development partners (contd.) How development partners can help Financial Assistance Support to conduct specific informal sector surveys

Q&A