Statistics on the informal employment employment in the

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 1. Objectives 2. Key derived variables 3. Key questions and flowcharts 4. Variables specifications 5. Group activity: identify key questions and specifications ILO Department of Statistics 2

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 3

2. Key derived variables ILO Department of Statistics 4

Starting point: derived variables Informal Formal employmen t t 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_job 1_ins_sector; • Informal and formal employment: variable Nature ILO Department of Statistics of the job (formal, informal)- 6

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 7

3. Key questions and flowcharts ILO Department of Statistics 8

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 ILO Department of Statistics 9

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 Y N Seeking work for pay/profit Y Reason of absence Duration ≤ 3 mo. Y E Labour force ILO Department of Statistics Active method Duration >3 mo. Pay N Y Want work Reason not N seeking Available Y Y U N N N Reason / Situation Willing Others Potential LF Outside labour force 10

Employment flow chart (2) ILO Department of Statistics 11

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 ILO Department of Statistics • Status in employment • Job-related benefits (employees) o Contribution by employer to pension funds / retirement schemes o Paid annual leave o Paid sick leave o Medical or health coverage, or other job-based benefits as per national context 12

Aggregated institutional sector flowchart ILO Department of Statistics 13

Informal employment flowchart ILO Department of Statistics 14

4. Derived variables specifications (Example from Brunei LFS 2014 questionnaire) ILO Department of Statistics 15

Aggregated status in employment Original question(s) in the questionnaire: D 05 Variable: ilo_job 1_ste_icse 93 Label: Status in employment (ICSE 93) Categories, labels, and specifications (recode): 1= Employees (wage workers): D 05= 1, 2, or 6 2= Employers: D 05= 3 3= Own account workers: D 05= 4 4= Contributing family helpers: D 05= 5 ILO Department of Statistics 16

Aggregated institutional sector (1) Original question(s) in the questionnaire: Institutional sector (D 15); Type of ownership (D 16); Registration (D 17); and Bookkeeping (written books of accounts, D 18); Location/ place of work (D 13). Variable: ilo_job 1_ins_sector Label: Aggregated institutional sector Categories: 1= Formal sector 2= Informal sector 3= Households (private households). ILO Department of Statistics 17

Aggregated institutional sector (2) Variable specifications: Formal sector: ilo_job 1_ins_sector = 1 D 15= 1, 2, or 4; OR D 16= 1; OR D 17= 1; OR D 18= 1. Informal sector: ilo_job 1_ins_sector = 2 (D 13= 3; OR D 15= 3 or 4) AND (D 16= 2 or 3; AND D 17= 2, 3, or 4; AND D 18= 2 or 3) (To include missing values: can use the negative statements). Households: ilo_job 1_ins_sector = 3 D 13= 2. ILO Department of Statistics 18

Nature of job- informal employment (1) Original question(s) in the questionnaire: Employer’s contribution to social security (D 10); Paid annual leave/ compensation (D 11); and Paid sick leave (D 12). Intermediary derived variables: Aggregated status in employment (ilo_job 1_ste_icse 93); Aggregated institutional sector (ilo_job 1_ins_sector). Variable: ilo_job 1_ife Label: Formal or informal nature of employment Categories: 1= Formal employment 2= Informal employment. ILO Department of Statistics 19

Nature of job- informal employment (2) Variable specifications: Formal employment: ilo_job 1_ife = 1 • (ilo_job 1_ste_icse 93= 1, AND D 10= 1, AND D 11= 1, AND D 12= 1); OR • ilo_job 1_ins_sector= 1, AND ilo_job 1_ste_icse 93= 2 or 3. Informal employment: ilo_job 1_ife = 2 • (ilo_job 1_ste_icse 93= 1, AND (D 10= 2 or 3, OR D 11= 2 or 3, OR D 12= 2 or 3)); OR • (ilo_job 1_ste_icse 93= 2 or 3, AND ilo_job 1_ins_sector= 2 or 3); OR • ilo_job 1_ste_icse 93= 4. ILO Department of Statistics 20

5. Group activity • Organize participants into 3 groups of countries; • Identify countries that have a recent standalone 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; ILO Department of Statistics 21

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 22