1 Workshop on Informal Employment and Informal Sector Data Collection: Strategy, Tools and Advocacy Amman, April 2008 Phase1 of the 1-2 survey: Concepts and objectives Sébastien Merceron (DIAL - Insee)

2 Contents 1.Introduction: the non-observed economy 2.The 1-2 Survey 3.Concepts developed in Phase1: 1.Informal sector 2.Informal employment 4.Main objectives of Phase1: 1.Measure informal employment 2.Measure informal sector size 3.Filter individuals for the Phase2

3 1. The non-observed economy Gaps in national accounts while trying to reconcile data on output, income and expenditure (balance between uses and resources) Significant underestimation of the GDP Low labor participation rates, especially for women → Raise awareness that something is missing in national indicators and official records (GDP, employment, …) : The “Black Box” of statistics

4 1. The non-observed economy The Non-Observed Economy has been defined in the OECD handbook as: 1) illegal production 2) underground production, 3) informal sector production, 4) household production for own final use Informal economy= informal sector + informal employment outside the informal sector

5 2. The 1-2 Survey : a mixed survey Data is collected in two phases: First phase: Labour Force Survey –Collect data on employment, adding questions on informal employment –Integrate questions in LFS to identify Household Unincorporated Enterprises for Market (HUEM) Second phase; HUEM Survey –Use first phase data to construct sampling frame for HUEMs –Collect data on HUEM Identification of ‘informal sector’ enterprise is done in the data analysis stage

6 2. The 1-2 Survey : The scheme

7 3. Concepts developped in Phase1: a) The Informal sector Informal units typically operate at a low level of organisation, with little or no division between labour and capital as factors of production and on a small scale. Expenditure for production is often indistinguishable from household expenditure. Activities are not necessarily performed with the deliberate intention of evading the payment of taxes or social security contributions, or infringing labour or other legislations or administrative provisions. Labour relations are based mostly on casual employment, kinship or personal and social relations rather than contractual arrangements with formal guarantees.

8 Informal sector : business-based definition the informal sector is a sub-sector of the household institutional sector in the system of national accounts To be excluded: all incorporated enterprises, non- profit institutions serving households, government institutions. at least some production must be marketed, which excludes production of goods and services exclusively carried out for own final use Own-accounts workers / informal employers

9 Definition of the HUEM = Household Unincorporated Enterprises for Market A business is a HUEM if: Private sector (≠public bodies, association…) Owned by individuals/households (≠company) No formal written accounts (≠ separation between private life and business) Enterprises with at least some market output (≠ own final consumption)

10

11 Informal sector = part of a HUEMs Additional criteria: Size < threshold (in terms of number of jobs or number of paid employees), Not registered No specific business name No separate business bank account Without professional premises …

12 3. Concepts developped in Phase1: a) The Informal employment The word “informal” has also been a source of misunderstanding and confusion. The 17th ICLS (ILO, 2003) defined informal employment as a broader concept, which include “informal” employees working for formal or informal economic units without being registered or declared by their employers. While Informal sector refers to the informal link between the State and the business owner. Informal employement refers to the informal link between employer and employee. → Job precariousness / risks / quality / work conditions

13 Informal employment : criteria While the concept of informal sector refers to production units as observation units, the concept of informal employment refers to jobs as observation units Jobs rather than employed persons. CRITERIA : no written contract no pay slip no legal or social protection outworkers (home-based workers, streets workers) casual/temporary job absence of labour union…

14 4. Objectives of the Phase1: a) Identify jobs in the informal sector (institutional sectors) b) Measure informal employment c) Identify heads of HUEMs: → see next presentation

15 a)Questions to identify jobs in informal sector (institutional sectors) Questions for both main and (eventual) secondary activity, for workers aged 15 years or above.

16

17

18 b) Questions to measure informal employment Questions for both main and (eventual) secondary activity, for workers aged 15 years or above.

19 Module For EMPLOYEES only

20 Module For EMPLOYEES only

21 Additional questions

22 Thank you for your attention ►