Statistics on the Informal Economy: Definitions, Regional Estimates & Challenges

This WIEGO working paper addresses the question of how to compile statistical data that meaningfully compares something as dynamic, diverse and conceptually contested as the informal economy. 

Following a renewed call for international statistics on the informal economy, this paper outlines regional and country-level data and gives readers insights on estimates of different forms of informal employment, across different regions, for men and women in various sectors in low-, middle- and high-income countries

The first chapter deals with definitions and the difficulties of having a common classification system that is used in a standardized way, despite the diversity of contexts of the informal economy. One of the authors’ main arguments is the call for a more collaborative development of comparable, coherent statistical data on the informal economy in all regions of the world. Based on 40 countries with direct measures of the informal economy and 80 with indirect ones, and with a more robust analytic approach compared to the previous report from 2002, statistics reveal large differences in the sizes of the informal economy, both within and across regions and between low-, middle- and high-income countries.

The second part focuses on estimates for a range of countries, where informal employment is on average more than 50 per cent of non-agricultural employment, with the highest percentage, 82 per cent, in South Asia.  

               The paper suggests the formulation of goals in three areas that need improvement: One relates to the development of a common conceptual and procedural understanding of data collection, including the skills that are required to gather data and the awareness of its value. Second, concepts and methods themselves have to be reviewed to fit e.g. agricultural employment and the diversity of classifications, especially in high-income countries, into a commonly accepted and used system. Third, the value of data increases if it is more actively used and disseminated. Thus, statistical agencies, research groups and policy makers should be encouraged to use, maintain and facilitate access to their data and provide a greater understanding of the informal economy.

This paper can be downloaded from: http://wiego.org/publications/statistics-informal-economy-definitions-re...

Booknote prepared by Julia Wesely.