Statistics on the informal employment & employment in the informal sector: From questions to derived variables Tite Habiyakare, Senior Statistician, ILO Regional Office for Asia and the Pacific Regional Course on Informality: Definitions, Measurement, SDGs and Other Policy Indicators Chiba (Japan), 16-20 October 2017

Contents Objectives Key derived variables Key questions and flowcharts Variables specifications Group activity: identify key questions and specifications ILO Department of Statistics

1. Objectives of the Session From the conceptual framework of informal economy to an operational statistical definition of the derived variables; Identify in the survey questionnaire, questions that are needed to reproduce the derived variables; Using the questions and appropriate categories of these questions, prepare the specifications to obtain the derived variables. ILO Department of Statistics

2. Key derived variables ILO Department of Statistics

Starting point: derived variables Informal employment Formal employment Total Total employment A B C Informal sector D E F Formal sector G H I Households J K L Employment in agriculture M N O

Variables to create (1) Employment: inside a variable such as Labour force status classification (employed, unemployed, outside the labour force)- ilo_lfs; Informal and formal sector: variable called Aggregated institutional sector, using the main job (formal sector, informal sector, household)- ilo_job1_ins_sector; Informal and formal employment: variable Nature of the job (formal, informal)- ilo_job1_ife. ILO Department of Statistics

Variables to create (2) Other intermediary variables that may be needed for the calculation of key derived variables: Status in employment: variable Aggregated status in employment, with main categories (employees or wage workers, employers, own-account workers, and contributing family helpers); Etc. ILO Department of Statistics

3. Key questions and flowcharts ILO Department of Statistics

Key questions: employment Worked for pay of profit (at work); Run a business for profit (at work)- with checks for sale if the business is in agriculture; Helped unpaid a family member in a work for pay or profit; Temporary absence from work for pay/profit & raisons for absence, and checks for return (or continued attachment to the work). ILO Department of Statistics

E U Employment (LFS classification) flow chart (1) Worked for pay / profit for 1+ hours NOT EMPLOYED (without work for pay/ profit) N Y With job, not at work N Seeking work for pay/profit Y Y N Reason of absence Active method Want work Duration Y N ≤3 mo. >3 mo. Duration Reason not seeking Pay N Available Available Y N Y N Y Reason / Situation E U Potential LF Willing Others Labour force Outside labour force ILO Department of Statistics

Employment flow chart (2) ILO Department of Statistics

Key questions: informal economy Informal sector employment (ISE) Informal jobs Institutional sector Legal organization / type of ownership Registration of enterprise Type of accounts kept Taxation Size Industry (if excluding agriculture) Type of place of work Status in employment Job-related benefits (employees) Contribution by employer to pension funds / retirement schemes Paid annual leave Paid sick leave Medical or health coverage, or other job-based benefits as per national context ILO Department of Statistics

Aggregated institutional sector flowchart ILO Department of Statistics

Informal employment flowchart ILO Department of Statistics

4. Derived variables specifications (Example from Brunei LFS 2014 questionnaire) ILO Department of Statistics

Aggregated status in employment Original question(s) in the questionnaire: D05 Variable: ilo_job1_ste_icse93 Label: Status in employment (ICSE93) Categories, labels, and specifications (recode): 1= Employees (wage workers): D05= 1, 2, or 6 2= Employers: D05= 3 3= Own account workers: D05= 4 4= Contributing family helpers: D05= 5 ILO Department of Statistics

Aggregated institutional sector (1) Original question(s) in the questionnaire: Institutional sector (D15); Type of ownership (D16); Registration (D17); and Bookkeeping (written books of accounts, D18); Location/ place of work (D13). Variable: ilo_job1_ins_sector Label: Aggregated institutional sector Categories: 1= Formal sector 2= Informal sector 3= Households (private households). ILO Department of Statistics

Aggregated institutional sector (2) Variable specifications: Formal sector: ilo_job1_ins_sector = 1 D15= 1, 2, or 4; OR D16= 1; OR D17= 1; OR D18= 1. Informal sector: ilo_job1_ins_sector = 2 (D13= 3; OR D15= 3 or 4) AND (D16= 2 or 3; AND D17= 2, 3, or 4; AND D18= 2 or 3) (To include missing values: can use the negative statements). Households: ilo_job1_ins_sector = 3 D13= 2. ILO Department of Statistics

Nature of job- informal employment (1) Original question(s) in the questionnaire: Employer’s contribution to social security (D10); Paid annual leave/ compensation (D11); and Paid sick leave (D12). Intermediary derived variables: Aggregated status in employment (ilo_job1_ste_icse93); Aggregated institutional sector (ilo_job1_ins_sector). Variable: ilo_job1_ife Label: Formal or informal nature of employment Categories: 1= Formal employment 2= Informal employment. ILO Department of Statistics

Nature of job- informal employment (2) Variable specifications: Formal employment: ilo_job1_ife = 1 (ilo_job1_ste_icse93= 1, AND D10= 1, AND D11= 1, AND D12= 1); OR ilo_job1_ins_sector= 1, AND ilo_job1_ste_icse93= 2 or 3. Informal employment: ilo_job1_ife = 2 (D10= 2 or 3, OR D11= 2 or 3, OR D12= 2 or 3)); OR (ilo_job1_ste_icse93= 2 or 3, AND ilo_job1_ins_sector= 2 or 3); OR ilo_job1_ste_icse93= 4. ILO Department of Statistics

5. Group activity Organize participants into 3 groups of countries; Identify countries that have a recent stand-alone LFS questionnaire, and select one questionnaire to work with (or more than 1 if needed); Identify questions that are needed to reproduce the derived variables for the informal economy; Propose the specifications you would use to obtain the derived variables for the informal economy. ILO Department of Statistics

References JPKE (2014), Labour Force Survey 2014 Report, Bandar Seri Begawan, October 2015; ILO (2013), Measuring informality: A statistical manual on the informal sector and informal employment, Geneva, October 2013; ILO (1993), Resolution concerning statistics of employment in the informal sector, Geneva, January 1993; ILO (2003), Guidelines concerning a statistical definition of informal employment, Geneva, November 2003. ILO Department of Statistics