Statistics on the informal economy

In many countries, informal employment represents a significant part of the economy and labour market and plays a major role in production, employment creation and income generation. However, informality puts workers at a higher risk of vulnerability and precariousness. Indeed, informality has a strong adverse impact on the adequacy of earnings, occupational safety and health and working conditions in general.

In the context of fragmented labour markets or insufficient social safety nets or where wages and/or working hours in formal jobs are low, workers may resort to informal employment. Thus, key labour indicators such as the unemployment rate and time-related underemployment would fail to convey a full picture of the labour market.

Statistics on informal employment provide valuable information on the quality of employment and are crucial to a comprehensive understanding of the labour market, in both developing and developed countries.

Table of contents

Featured publication

Women and Men in the Informal Economy: A Statistical Picture

Women and men in the informal economy: A statistical picture. Third edition

The third edition of this work provides, for the first time, comparable estimates on the size of the informal economy and a statistical profile of informality in all its diversity at the global and regional levels. A common set of criteria to measure informal work has been applied to more than 100 countries, both developed and developing.


Data

Projects

In early 2021, the ILO Statistics Department started a three-year project to engender informality statistics, funded by the Bill and Melinda Gates Foundation.

The project is running in parallel to the broader review of standards for informality statistics, currently undertaken through the ILO’s Working Group on the Review of Informality Statistics. It supports integration of gender in the new standards, and the development of gender-related guidance and tools for measuring informality.

The main activity of the project is to test statistical concepts and household survey questionnaires, using cognitive interviewing in two countries in 2021 and a pilot field test in one country in 2022. The findings from those tests will support the working group in its discussions and drafting of the new standards, to be adopted by the 21st ICLS in 2023.

The project is also assessing the existing and anticipated needs for gender data on informality (data demand) and reviewing the use of data in strategy setting and policy formulation, making recommendations to strengthen the production, accessibility and use of gender statistics on informality.

For more information, please contact Jessica Gardner, Department of Statistics (gardner@ilo.org). 

Methods

Adopted in 1993 and 2003, the current statistical standards for measuring the informal economy need updating. They are out of sync with more recent international standards for measuring work. The 20th International Conference of Labour Statisticians (ICLS) established a working group in 2018 to develop a new conceptual framework for measuring informality (see para 124). The 21st ICLS in 2023 will discuss and adopt the new standards. A comprehensive set of tools and indicators will guide production, analysis and use of the data.

Coordinated by the ILO, the Working Group on the Review of Informality Statistics includes representatives from national statistical systems, international agencies and development partners. It meets annually with four subgroups established to support the work in between annual sessions.

For more information, please contact Michael Frosch, Department of Statistics (frosch@ilo.org).

Reports and other relevant documents

List of working group countries and agencies

Countries

Argentina, Brazil, Chile, China, Colombia, Dominican Republic, Ecuador, Gambia, Ghana, India, Indonesia, Italy, Jordan, Lebanon, Malaysia, Mexico, Mongolia, Montenegro, Morocco, Nigeria, Oman, Pakistan, Palestine, Peru, Philippines, Poland, Saudi Arabia, South Africa, Sri Lanka, Thailand, Tunisia, Uganda, Vietnam

 Observers

AFRISTAT, DIAL, GCC-STAT, CISSTAT, DATA 2X, EUROFOUND, EUROSTAT, FAO, OECD, IMF, SPC, UNHCR, UN Statistics Division, UN Women, WIEGO, World Bank

Indicator description: Informal employment and informal sector

Indicator descriptions provide a concise overview of concepts and definitions, uses, sources and limitations.


Guidebook on SDG Labour Market Indicators

Decent Work and the Sustainable Development Goals: A Guidebook on SDG Labour Market Indicators

This Guidebook provides a detailed overview of the labour market indicators included in the Sustainable Development Goals Global Indicator Framework. It is intended to serve as a manual of best practices for calculating and interpreting the SDG labour market indicators, with a view to monitoring progress made at the national and international levels towards the achievement of the SDGs.


Decent Work Indicators: Concepts and definitions

Decent Work Indicators - Guidelines for producers and users of statistical and legal framework indicators

Decent work is central to sustainable poverty reduction and is a means for achieving equitable, inclusive and sustainable development. The ILO Declaration on Social Justice for a Fair Globalization recommends the establishment of appropriate indicators to monitor the progress made in the implementation of the ILO Decent Work Agenda. The ILO is supporting member States through technical assistance and capacity building at national, sub-regional and regional levels in this regard.


A statistical manual on the informal sector and informal employment

Measuring informality: A statistical manual on the informal sector and informal employment

This manual is intended for national statistical offices and other producers of statistics planning programmes to produce statistics on the informal sector and informal employment. The manual provides technical guidance on implementing international standards, presenting alternative measurement methodologies along with examples based on national experience, and includes guidelines for the dissemination of statistics on the informal sector and informal employment.


Guidelines concerning a statistical definition of informal employment

Guidelines concerning a statistical definition of informal employment

Adopted by the 17th ICLS (2003), these guidelines complement the resolution concerning statistics of employment in the informal sector of the 15th ICLS, and encourages countries to test the conceptual framework on which they are based.


Measuring the Non-Observed Economy - A Handbook

Measuring the non-observed economy. A handbook

The main focus of the Handbook is to provide guidance on how to produce exhaustive estimates of GDP. This means ensuring that as many productive activities as possible are observed, i.e., directly measured in the basic data on production, incomes, and expenditures from which the national accounts are compiled. It also means ensuring that non-observed activities are nevertheless accounted for, i.e., indirectly measured during compilation of the national accounts.


Resolution concerning statistics of employment in the informal sector

Adopted by the 15th ICLS (1993), this resolution provides technical guidelines as a basis for the development of suitable definitions and classifications of informal sector activities and the design of appropriate data collection methods and programmes, in the hopes such standards will enhance the international comparability of statistics.


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