11-14 January, 2016 Addis Ababa, Ethiopia Accounting for informal sector in national accounts through indirect methods:  using labor input methods  Issaka NIANGAO Ingénieur Statisticien Economiste Email: niangaoiss@yahoo.fr 11-14 January, 2016 Addis Ababa, Ethiopia 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia Outline of the presentation Introduction Goal Methodology Data Sources Results Methods of integration in the national accounts Conclusions 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia I. Introduction We note that the informal sector covers all units or individuals that have at least one of the following characteristics: Units do not keep written accounts 2. Units are not recorded in the commercial register 11-14 January, 2016 Addis Ababa, Ethiopia 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia I. Introduction (cont) There are difficulties in effectively assessing the informal economy. That difficulties are linked: Scoped to the informal sector At the unavailability of data sources The lack of financial and human resources to collect information annually to the relevant units. 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia II. Goal This study aims at providing a method of accounting of the informal sector according to the approach by the workforce. It will focus on Burkina Faso's non-agricultural informal economy in 2009. 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia III. Methodology The methodology that we will use comprises three steps. It consists of: Developing a matrix of employment Estimating output per capita and per capita wage; Estimate the value added and employment in the informal sector by branches of activity. 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia III. Methodology (cont) Development of the employment matrix The approach is to use data from the General Census of Population and Housing (RGPH) and The ultimate survey on household living conditions (EICVM). . 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia Indicators used 1.1 Population aged over 15 years in 2009. ( ). 1.2 working population in 2009 ( ). 1.3 working population according to the employer in 2009 (Public, para-public, private formal, private informal). 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia structural parameters used 1.4 Percentage of the employed labor force in 2009 ( ). 1.5 structure of the working population by employer. 11-14 January, 2016 Addis Ababa, Ethiopia

Estimation formulas used 1.6 working population in 2009 was equal to the proportion of that population multiplied by the population aged 15 years and older.. 1.7 working population of area X (SectX) in 2009 is equal to the proportion of that population multiplied by the number of the employed population.

11-14 January, 2016 Addis Ababa, Ethiopia Distribution of employment by industry according to employer (public, para - public and private formal) 1.8 Employees of public workers and the para-public are provided annually by administrative sources and additional collections. 3.4 The number of formal private workers are provided annually by the Statistics and Tax Statements (DSF) that companies file with the Statistic Institute (INSD ) through the General management of taxes (DGI). 3.5 Total employees found with previous formula allows analysis and arbitration if possible of the estimate provided by the sources and additional collections. 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia Distribution of employment by industry in the informal private 1.9 The numbers of non-formal private workers are provided by the following formula. The number of employed people in the informal sector is equal to the proportion of the working population in the informal sector multiplied by the total employed population. 3.7 The distribution of non-formal private workers by branch is done using the structure provided by the Industrial and Commercial Census. 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia Distribution of employment by industry in the informal private (cont) The size of the working population of the branch i is the proportion of workers in the informal sector of the industry multiplied by the number of employed people in the informal sector. Where 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia Distribution of workers by status of employment 1.10 For each branch, the working population in the informal sector can be broken down by employees status (employees of informal private, independent, employers, other assets). 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia Distribution of workers by status of employment (cont.) 1.11 The number of employees salaried in the informal private of the branch i is equal to the proportion of informal sector employees salaried multiplied by the number of employed people in the informal sector. 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia Distribution of workers by status of employment (cont.) The same formula is used for all status with following notation in formula 11-14 January, 2016 Addis Ababa, Ethiopia

2. Estimated production per head and per capita wage The ideal data source for estimating the parameters required by this method is a survey type 1-2; The latest survey on the informal sector are obsolete, we used the RIC(2009) and the previous year's accounts. Production of non-commercial branches is estimated with the turnover of Informal production unit (IPU). The production of commercial branches is estimated with gross margins of IPU. For the branches not covered by the RIC or branches for which the RIC does not fully covered, the previous year's accounts have been used as source of information. 11-14 January, 2016 Addis Ababa, Ethiopia

3.Estimate the value added and salary in the informal sector by industries The approach is to estimate the total production of each branch by using the array of employment and output per worker of each branch. The value added of the branch i is obtained by multiplying the total output of the industry through its technical coefficient (CI/P).

11-14 January, 2016 Addis Ababa, Ethiopia IV. Data sources This approach is intended to use the following data sources : the General Census of Population and Housing (RGPH) the Industrial and Commercial Census (RIC) the National Survey of Employment and the Informal Sector (ENESI) The ultimate survey on household living conditions (EICVM). National accounts of year 2008. 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia V. Results 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia V. Results 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia V. Results (cont) 11-14 January, 2016 Addis Ababa, Ethiopia

VI. Methods of integration in the national accounts It is a discussion that I propose to show a methodology to integrate the following results in the NA. The methodology comprises four (4) steps. Step1: Integrate production and employment as calculated by the method during pre-arbitration work; Step2: make corrections on the production during balance between supply and use works; 11-14 January, 2016 Addis Ababa, Ethiopia

VI. Methods of integration in the national accounts (cont.) Step3: make a final adjudication on the value added by analyzing the balance between supply and demand for intermediate consumption; Step4: deciding on the level of production and added value and correct the actual job keeping unchanged output per head before turning to account synthesis work. N.B. Steps 2,3 and 4 may be iterative 11-14 January, 2016 Addis Ababa, Ethiopia

11-14 January, 2016 Addis Ababa, Ethiopia VII. Conclusion This study found: propose a method for assessing the informal economy; This method is to improve; due to its simple implementation, it can inspire countries to take into account the results of household survey in the estimation of the informal economy. 11-14 January, 2016 Addis Ababa, Ethiopia

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