2 March 2011

Delhi Group on Informal Sector Statistics

Purpose

Set up as an international forum to exchange experience in the measurement of the informal sector, document the data-collection practices, including definitions and survey methodologies followed by member countries, and recommend measures for improving the quality and comparability of informal sector statistics.

Year organized

1997

Participants

Experts from the statistical offices of Armenia , Australia , Bangladesh , Brazil , Colombia , Cuba , Ethiopia , Fiji , France , India , Indonesia , Malaysia , Mexico , Namibia , Nepal , Nigeria , the Philippines , Poland , the Republic of Korea , Sri Lanka , Thailand , Turkey , Venezuela ( Bolivarian Republic of) and Zambia ; international bodies, such as the Asian Development Bank, the Economic and Social Commission for Asia and the Pacific, the International Labour Organization, the Statistical Institute for Asia and the Pacific and the United Nations Statistics Division; and other institutions, such as the Centre for Development Alternatives, the Centre for Social Development, the French Scientific Research Institute for Development and Cooperation, the Gujarat Institute for Development Research, the Harvard Institute for International Development, the National Council for Applied Economic Research, the Self-Employed Women's Association, the Socio-economic Research Centre and Women in Informal Employment Globalizing and Organizing.

Meetings

First meeting: New Delhi , 20-22 May 1997.
Second meeting: Ankara , 28-30 April 1998.
Third meeting: New Delhi , 17-19 May 1999.
Fourth meeting: Geneva , 28-30 August 2000.
Fifth meeting: New Delhi , 19-21 September 2001.
Sixth meeting: Rio de Janeiro , 16-18 September 2002.
Seventh meeting: New Delhi , 2-4 February 2004.
Eighth Meeting: Nadi, Fiji 29-31 March, 2005.
Ninth meeting: New Delhi 11-12 May, 2006.
Tenth Meeting: Geneva 8-10 October, 2007.
Eleventh Meeting Geneva 27-29 January, 2010.

Topics considered

First meeting

The meeting was focused primarily on evolving the terms of reference of the Delhi Group and presenting papers on country experience in the collection and publication of informal sector statistics. The importance of the informal sector for the economies of developing countries and the developments in its measurement were also discussed by different international organizations.

Second meeting

The current status of, inter alia, informal sector statistics, limitations of comparability and country profiles was discussed. A number of technical issues, such as definitional issues, classification and operational problems, survey approaches and sampling designs, including mixed household and enterprise surveys, were discussed in detail. In addition, the contribution of the informal sector in terms of, inter alia, employment, value added and capital formation in the economy of participating countries was also discussed.

Third meeting

The meeting was structured to focus discussions on the following specific technical issues:

(a) Operationalization of the Fifteenth International Conference of Labour Statisticians/System of National Accounts, 1993 international definition of the informal sector;
(b) Strategies to address the issues relating to sampling frame and weighting in informal sector surveys;
(c) Methodologies for obtaining accurate measures of value added for the informal sector. The meeting recognized that the national definitions of the informal sector cannot be fully harmonized as the informal sector manifests itself in different ways in different countries. However, the recommendation was made to use the criteria of legal organization, type of account and product destination in the definition and identification of informal sector units.

Fourth meeting

The meeting consisted of three technical sessions devoted to:

(a) Presentation of results of informal sector surveys conducted by different countries in relation to the action taken and limitations of different survey methods and sampling designs;
(b) Methodology for developing more accurate measures of value added and estimation of the contribution of the informal sector to gross domestic product;
(c) Alternative structure of the International Standard Industrial Classification of All Economic Activities, Revision 3, for the informal sector.

Fifth meeting

The technical issues were structured along the following topics:

(a) Application of informal sector definition: treatment of persons at the borderline between own-account workers and employees;
(b) Development of criteria for the identification of persons in informal (or precarious, non-standard etc.) employment inside and outside the informal sector;
(c) Sampling frames and designs for mixed household and enterprise surveys;
(d) Evaluation of informal sector survey data and measures for quality improvement;
(e) Country experience.

Sixth meeting

The sixth meeting considered the following issues:

(a) Operationalization of the concept of "informal employment" as distinct from "informal sector employment";
(b) Linkages of informal sector statistics with income and expenditure and poverty statistics;
(c) Establishment of comparable data sets on the informal sector;
(d) Methods and procedures for the collection of informal sector statistics on a regular basis, including the preparation of a manual.

Seventh meeting

The seventh meeting considered the following issues:

(a) Defining informal employment and methodologies for its measurement;
(b) Improving the quality of informal sector statistics - country experience;
(c) Measurement of the informal economy through income and expenditure surveys.

Eighth Meeting

Technical issues considered in the Eighth meting are as under:

a) Operationalization of conceptual framework of informal employment/informal economy
b) Indicators on Informal Sector and Informal Employment
c) Measuring the links between poverty and informal employment
d) Inter-Regional Programme of technical co-operation on the Measurement of the Informal Sector and Informal Employment.
e) Methods of evaluation of data quality of surveys on the informal sector and informal employment
f) Survey Methods and questions for identifying status in employment categories and Revision of ISIC Rev. 4.

Achievements

(a) Stocktaking and documentation of existing country experience in the measurement of informal sector and informal employment;
(b) Based on the Fifteenth International Conference of Labour Statistics resolution, development of a harmonized definition of the informal sector to obtain internationally more comparable statistics;
(c) Refinement of the Fifteenth International Conference of Labour Statistics definition (e.g. regarding the treatment of households employing paid domestic workers);
(d) Inputs to the revision of the International System of Industrial Classifications;
(e) Provision of technical feedback to countries for the development of informal sector statistics;
(f) Upon the initiative of the Delhi Group, an integrated survey of households in India was conducted in 1999-2000 on employment, unemployment, consumer expenditure and non-agricultural enterprises in the informal sector that was the largest survey on the informal sector ever undertaken in the world;
(g) Upon the suggestion by the Delhi Group and with the support of its members, the International Labour Organization developed a conceptual framework for defining informal employment that was adopted in the form of international guidelines by the Seventeenth International Conference of Labour Statistics as a complement to the Fifteenth International Conference of Labour Statistics resolution;
(h) Organization of annual meetings on specific topics agreed by the Group, which take stock of the progress achieved and are documented through the publication of meeting reports (including the papers discussed in the meetings);
(i) Conceptual and analytical work done on measuring the links between poverty and the informal sector/informal employment.

Ninth meeting

Technical issues considered in the ninth meeting are as under:

The Group discussed many important issues of which mention may be made of Informal Sector in the revised SNA, measuring contribution of Informal Sector to GDP and Informal Employment, measuring the links between poverty and Informal Employment, data quality of surveys on Informal Sector and Informal Employment.

Achievements & Recommendations

The need for active collaboration between the Delhi Group and Advisory Expert Group on SNA 1993 updating was felt in earlier meetings of the Group. The Ninth meeting has been successful in bringing both Groups together for discussing the issues relating to SNA updating in respect of informal sector and thus set a stage for the desired collaboration. Drawing up the road map for release of Manual on Survey of Informal Sector and Informal Employment has been an important achievement.

(i) Treatment of Informal Sector in a separate Chapter in the SNA 1993-Rev-1 was appreciated. Such inclusion would be an instrument for improvement in the National Accounts, among other things, by reflecting the Informal Sector contribution to the Gross Domestic Product (GDP).

(ii) The group endorsed the annotated outline for the chapter on the Informal Sector in the SNA 1993 Rev. 1 as recommended by the Advisory Expert Group (AEG). In respect of informal employment, the Group suggested examining this in a satellite accounting framework.

(iii) The Group supported the initiative taken by ILO for the preparation of a Manual on Surveys of Informal Employment and Informal Sector. This was a major achievement. This would consolidate the work so far done by the Delhi Group on conceptual frame work for measuring informal sector and informal employment.

(iv) The Group recommended that the Manual should bring out concepts, definitions and survey methodologies utilizing best practices and experiences.

(v) Measuring the contribution of the informal sector/informal employment to GDP remains a major challenge. The Delhi Group encouraged further efforts to prepare reliable and, in the longer run, comparable measures. The Group looked forward to the identification of good practices in the prospective manual on surveys on informal employment and informal sector and in the chapter on informal sector in the SNA. In particular, the Delhi Group stressed that practices that treated the economic activities of the informal sector as a residual within the National Accounts ought to be abandoned, and direct sources of information should be given a greater role.

(vi) The group endorsed the view that the 10 th Meeting of the Group at Geneva would be devoted exclusively for discussion and finalization of the Manual on Survey of Informal Sector and Informal Employment and the Draft Chapter on Informal Sector in SNA 1993 Rev.-1.

(vii) The Delhi Group recognized the efforts for re-defining the unorganized sector and estimating its size by the National Commission on Enterprises of Government of India, in the unorganized/informal sector. A Task Force had been set up to formulate harmonized definition of unorganized/informal sector and measuring the size and distribution of informal sector.

(viii) There is a wide gap in the estimates of employment from Household and Enterprise Surveys done in India. This, perhaps, is due to inadequate capturing of wage employment/freelancing, a constituent of informal employment. A methodology suggested by the Central Statistical Organization of India of conducting Enterprise Surveys that circumvented the problem of non-recognition of wage employees/freelancers was being tested in a few sectors such as goods transportation by road, advertising, motion picture and video film production. It needed to be firmed up by testing at a larger scale.

(ix) The Group noted the conceptual work done on measuring the links between poverty and informal employment and measuring contribution of informal sector and informal employment to GDP, linkage of informal employment and poverty with specific reference to vulnerable section of the society such as women workers, home based and street based workers.

(x) The Delhi Group recognized the innovations as introduced in India in the recent quinquennial labour force surveys to measure employment in informal sector and informal employment and recommended that the innovations might be introduced in annual surveys.

(xi) The Group took note of the Time Use Surveys conducted in India and other developing countries. Time Use Survey has the potential to measure the work pattern of the population. It can throw light on the need to improve estimation of work participation rates in labour force surveys, although Time Use Surveys are not a substitute for Labour Force Surveys. Systematic and sound methodological comparison of results of Time Use Surveys and Labour Force Surveys could be encouraged.

Tenth meeting

There were extensive deliberations on the draft Chapters 1 to 5 and 10 of the Manual on Surveys of Informal Employment and Informal Sector, which is one of the deliverable outputs of the Delhi Group in association with the ILO. The preliminary draft Chapter 24 of the 1993 SNA Rev.1 on the Informal Sector along with the background note from the UNSD and the Project Manager of SNA Rev.1 was also discussed at length. Besides these agenda papers, a paper prepared on “Alternate Aggregation for the Informal Sector in ISIC Rev.4” was also presented. The purpose of this paper was to suggest an alternative aggregation of ISIC levels to suit the specialized needs and characteristics of economic activities carried out in informal sector.

The participants, while approving the broad outlines of the draft Chapters and other agenda papers, suggested some changes in terms of their content and structure.

Recommendations of the 10 th meeting of Delhi Group:

i) Manual on surveys of Informal Employment and Informal Sector (Chapter 1-5, 10)

The participants while approving the broad outlines of the draft chapters suggested some changes in terms of their contents & structures.

ii) Alternate aggregation for informal sector in ISIC Rev.4

1. The Group noted that the alternate ISIC aggregation is not to define the informal sector. Keeping in view the objective and purpose of alternate aggregation, it recommended that the title may be revised as “Alternate ISIC 4 aggregations for analysis and reporting of Informal Sector Statistics”;
2. The alternate aggregation as proposed by UNSD is well appreciated by the Group and is recommended with following modifications:
   
   (a) In category IVa, in the Title “(other than via mail order houses and Internet)” may be deleted;
   (b) ISIC division 94 may be shifted from Category VIII to XI;
   (c) One additional sub-classification may be included under category VII for ISIC classes 5610 and 5621.

iii) Draft Chapter of SNA Rev.1 on informal sector

The Delhi Group:

1. Expressed general support for the draft of the Chapter;
2. Advised that the Chapter should specify the data items needed to provide coverage of informal sector enterprises in a national accounts framework. Further, advised that these data items should be the items in the production and generation of income accounts;
3. Indicated that the description of informal employment in the Chapter is adequate. Furthermore, recommended that the Chapter advise its presentation in a satellite framework as suggested by the Delhi Group in its 9th meeting;
4. Noted that the present section on the informal sector’s scope and characteristics should be developed to indicate what national accounts seek to capture and how that is linked to ICLS concepts of informal sector;
5. Proposed that the text on terminology be extended to first present the commonalities between the 15th ICLS on employment in the informal sector and the SNA in terms of their scope and characteristics;
6. Advised that in the description of three measurement approaches, a reference be made to the ILO Manual on Informal Sector and Informal Employment. Further, indicated that the complementarities and benefits of the related data sets for national accounts compilation should be presented and that a description of the labour input matrix for calibration and validation purpose should be added;
7. Suggested that section E 3 may be redrafted in a positive tone and expanded, highlighting the contribution of the data set on the informal sector for national accounts compilation.

Eleventh meeting

1. During the eleventh meeting , there were extensive deliberations on the draft Chapters of the Manual on Surveys of Informal Employment and Informal Sector, which is one of the deliverable outputs of the Delhi Group in association with the ILO. General discussion about the timeline for manual finalization and handing over the draft manual to the ILO by the Delhi Group and subsequent procedures were discussed. Chairperson mentioned that by the end of May, 2010 manual will be handed over to ILO by Delhi Group; subsequent procedures for its publication rest with the ILO. The Manual will go through formal editing by the ILO and will be published in later part of year 2010 depending on ILO publication schedule. For translation into French language or any other language, ILO welcomes proposals for support.

2. The corrections required in the draft manual could be classified into 4 categories:

• Cross-referencing between chapters
• Harmonization of terms.
• Material not there and needs inclusion.
• Material already there and needs exclusion.

3. Categories 1 and 2 will be dealt with during editing stage. For category 3, it was agreed that the experts suggesting inclusion provide the material also.

4. The chapters of the manual were discussed in order and the issues raised and decisions taken have since been conveyed to the experts for taking necessary action regarding revision of chapters.

Planned Activities

The 12 th meeting of the Delhi Group is expected to be held in the first half of 2011. The finalization of the “Manual on Surveys of Informal Employment and Informal Sector” and the future activities of the Delhi Group will be discussed in the next meeting;

Point of contact

The Additional Director General
Central Statistical Organization (CSO)
Ministry of Statistics and Programme Implementation
Government of India, Room No. 13,
West Block-8, Wing-6 (Ground Floor), Sector-I,
R.K. Puram, New Delhi-110066, India
Telephone: (91-11) 2610-8529, FAX: (91-11) 2610 8404
E-mail : csopiu@nic.in
Web site: http://www.mospi.gov.in

Reporting to the UN Statistical Commission

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