working paper no. 3 - defining and measuring informal ...€¦ · defining informal paid employees...

1

UNITED NATIONS DEVELOPMENT ACCOUNT PROJECT: “INTERREGIONAL COOPERATION ON THE MEASUREMENT OF THE INFORMAL SECTOR AND INFORMAL EMPLOYMENT” 2006 ‐ 2009 WORKING PAPER NO. 3

Defining and Measuring Informal Employment and the Informal Sector in the Philippines, Mongolia, and Sri Lanka

James Heintz1

March 2010

1 Consultant, UNDA Project 0607A- Interregional Cooperation on the Measurement of Informal Sector and Informal Employment. Political Economy Research Institute, University of Massachusetts, Amherst. [email protected]

2

Acknowledgements Marco Principi (consultant) and Lorenzo Saggiorato (intern), with the ESCAP Statistics Division, prepared the tabulations for this paper.

3

Contents I. Introduction................................................................................................................. 4 II. Defining and measuring informal employment ............................................................. 4 III. Estimates of informal employment: the Philippines and Mongolia............................ 10 IV. Employment in household enterprises........................................................................ 16 V. Conclusions.................................................................................................................. 19 References......................................................................................................................... 19 List of Tables Table 1. Population, labour force, and employment, Philippines, 2009........................... 21 Table 2. Population, labour force, and employment, Mongolia, 2007/8. ......................... 22 Table 3. Employment by employment status and sex (agricultural and non-agricultural),

Philippines, 2009........................................................................................................... 23 Table 4. Employment by employment status and sex (agricultural and non-agricultural),

Mongolia, 2007/8.......................................................................................................... 24 Table 5. Urban and rural employment by employment status and sex, Philippines, 2009.

....................................................................................................................................... 25 Table 6. Urban and rural employment by employment status and sex, Mongolia, 2007/8.

....................................................................................................................................... 26 Table 7a. Agricultural employment by employment status and formal/informal sector,

Philippines, 2009........................................................................................................... 27 Table 7b. Non-agricultural employment by employment status and formal/informal

sector, Philippines, 2009. .............................................................................................. 28 Table 8a. Agricultural employment by employment status (enterprises v. own-use),

Mongolia, 2007/8.......................................................................................................... 29 Table 8b. Non-agricultural employment by employment status and formal/informal

sector, Mongolia 2007/8. .............................................................................................. 30 Table 9. Informal employment by sex and sector of activity, Philippines, 2009. ............ 31 Table 10. Urban and rural informal employment by sex and sector of activity, Mongolia,

2007/8. .......................................................................................................................... 32 Table 11. Unincorporated household enterprises by number of paid employees,

Philippines (2009) and Mongolia (2007/8)................................................................... 33 Table 12. Unincorporated household enterprises by sector of activity and sex of the

operator, Philippines 2009. ........................................................................................... 34 Table 13. Unincorporated household enterprises by sector of activity and sex of the

operator, Mongolia 2007/8............................................................................................ 35 Table 14. Unincorporated household enterprises by sector of activity and size, Philippines

2009............................................................................................................................... 36 Table 15. Unincorporated household enterprises by sector of activity and size, Mongolia.

....................................................................................................................................... 37 Table 16. Location of operation, unincorporated household enterprises, Mongolia, 2007/8

....................................................................................................................................... 38 Table 17. Share of respondents reporting problem associated with operating

unincorporated household enterprises in Mongolia, 2007/8......................................... 39

4

I. Introduction The concept of informal employment is meant to capture employment relationships that are not governed by formal economic regulations or basic social protections. There are several justifications for generating estimates of informal employment. Informal employment is often, but not always, more precarious with lower earnings. Households which depend on informal employment for their primary source of income often face higher risks of poverty (Chen, et al., 2005). Therefore, measuring the prevalence of informal employment is important for understanding the distribution of economic risks and sources of income inequality, including factors contributing to the economic vulnerability of women.

In addition, processes of globalization and far-reaching changes in national economies have had a direct impact on the structure of employment in countries around the world. Therefore, measurements of informal employment give us a more complete picture of the full array of employment activities, allow us to track changes over time, and provide us with a better understanding of the forces that impact the well-being of individuals, their families, and the households in which they live. This report reviews recent labour force surveys (LFSs)2 of three countries – Sri Lanka, the Philippines, and Mongolia – and suggests ways in which informal employment can be estimated from the survey data collected. For two of the countries – the Philippines and Mongolia – detailed estimates of informal employment are compiled and presented.

II. Defining and measuring informal employment a. International guidelines for defining the informal sector and informal employment Two concepts are relevant for the measurement of informal employment as discussed in this report: the informal sector and informal employment. The informal sector is an enterprise-based concept – i.e. the informal sector is comprised of all informal enterprises. When we use this enterprise-based concept to classify employment, we will refer to ‘employment in the informal sector’ – all employees, own-account workers, employers, and unpaid contributing family workers whose place of work is an informal enterprise. In contrast, ‘informal employment’ is a broader, jobs-based concept

2 The standard LFS of these countries were modified to incorporate data requirements for the estimation of informal employment and employment in the informal sector. The modified LFS served as the phase 1 survey of the two-phased “1-2” Survey on Informal Employment and Informal Sector piloted in these countries under the United Nations Development Account Project on Inter-regional Cooperation in Measurement of the Informal Sector and Informal Employment. For more information, refer to Working Paper No. 1- The “1-2” Survey: A data collection strategy for informal sector and informal employment statistics

5

that is not tied to the nature of the enterprise. Informal employment may exist in formal enterprises and in employment located outside of an enterprise (e.g. employment as a domestic worker). Individuals in informal employment are those who work in jobs lacking basic social or legal protections. To define the informal sector, informal enterprises must be distinguished from formal enterprises. In 1993, the 15th International Conference of Labour Statisticians (ICLS) adopted recommendations for defining the informal sector. The definition was developed, in part, to include the value of informal production in the system of national accounts (SNA). The focus on the enterprise was important for quantifying the contribution of the informal sector to aggregate economic activity. The resolution adopted by the 15th ICLS identified the following set of criteria for defining informal enterprises: Legal organization of the enterprise. Informal enterprises are private unincorporated enterprises for which no complete set of accounts is available that would distinguish the financial activities of the enterprises from those of the household/owners. Market production. A portion of the goods or services produced by the informal enterprise must be exchanged in market transactions. Household activities which produce goods or services exclusively for own-consumption are excluded. Size and/or registration. Informal enterprises are often identified in terms of their registration status with respect to national regulatory frameworks and legislation, i.e. informal enterprises are unregistered enterprises. Alternatively, the size of informal enterprises is used when information about registration is not available. In this case, size is defined in terms of the number of paid employees. Using this approach, an enterprise is informal if the number of workers falls below a certain maximum threshold. In practice, the full set of criteria may not be consistently applied in defining the informal sector. Specifically, the legal organization of the enterprises may be unknown or presumed. It is common to see estimates in which the size criterion or the registration criterion is the only indicator used to identify informal enterprises. The concept of ‘informal employment’ was developed to complement the concept of ‘employment in the informal sector.’ A primary motivation for extending the definition is that many aspects of informalisation are job-related, and not directly linked to the nature of the enterprise. In 2003, the 17th ICLS endorsed a framework that supplements the concept of employment in the informal sector with a jobs-based concept of informal employment.

Jobs are classified in terms of (1) employment status category (own-account workers, employers, contributing family workers, employees, and members of producer cooperatives) and (2) formal/informal status. Informal jobs are generally taken to be jobs that lack a core set of legal or social protections. The definition of informal employment

6

is jobs-based, so it is possible for multiple jobholders to be engaged in both formal and informal employment. In practice, the primary occupation is often used to define an individual’s status in informal employment when the focus is on the number of people employed (as opposed to the number of jobs).

As has already been stressed, ‘informal employment’ refers to employment which

is not regulated or which does not enjoy core social protections. However, the regulatory regime is conditional on an individual’s status in employment. Specifically, a distinct set of laws government the employment relationships of paid employees relative to those of the self-employed. ‘Labour law’ typically focuses on the relationship between employers (the principal) and employees (the agent). For the self-employed, often no clear principal/agent relationship is evident (or such relationships are hidden). Therefore, these forms of employment are typically regulated by the laws governing enterprises. Because of this distinction in the regulatory frameworks governing individuals in different employment statuses, the definition of informal employment must be flexible enough to accommodate paid employees and various forms of self-employment.

The ICLS framework for defining informal employment includes the following guidelines: The informal self-employed (informal own-account workers, employers, and members of producer cooperatives). Own-account workers, employers, and members of producer cooperatives are engaged in informal employment if the enterprise in which they work is informal. In these cases, the definition of informal employment corresponds to the definition of employment in the informal sector. Contributing family workers. All contributing family workers are classified as being engaged in informal employment. Wage employees in informal jobs. According to the ICLS guidelines, employees are considered to work in informal jobs if “their employment relationship is, in law or in practice, not subject to national labour legislation, income taxation, social protection or entitlement to certain employment benefits.” Own-account workers producing goods for own-use. Own account workers producing goods exclusively for their (or their households’) own final use are defined as being engaged in informal employment.

As with the definition of employment in the informal sector, in practice the criteria used to distinguish informal employment from formal employment vary from country to country and context to context. In the next section, we discuss the variables which could be used to define informal employment given the current labour force surveys of the Philippines, Mongolia, and Sri Lanka. b. Applied definitions for informal employment: Philippines, Mongolia, and Sri Lanka

7

The international guidelines for defining informal employment and employment in the informal sector provide a set of recommendations that can be applied to micro datasets collected through labour force surveys (or other household surveys). Numerous challenges arise when the guidelines, outlined above, are applied to specific survey data. Not all labour force surveys collect adequate information to define informal employment. In these cases, informal employment cannot be defined – or only approximations of informal employment can be defined – until the questionnaires are revised to collect information on the necessary variables. Second, the set of variables collected varies from survey to survey. Therefore, the applied definition must be adjusted to accommodate the variables which are available. Finally, the most appropriate indicators for distinguishing informal employment from formal employment will vary depending on the social, legal, and institutional context. Some degree of relativism in the measurement of informality is unavoidable. The three countries discussed here – the Philippines, Mongolia, and Sri Lanka – collected household survey data that permits an applied definition of informal employment. In this section, we discuss how the general framework from the 15th and 17th ICLS could be applied to this survey data. In subsequent sections, we present the estimates generated through the application of the specific definitions for two of the three countries: Philippines and Mongolia. Defining informal paid employees using labour force surveys

As noted above, the definition of informal employment is conditional on the status in employment. Therefore, we begin by considering how to define informal paid employees using the labour force survey data from the Philippines, Mongolia, and Sri Lanka. As we will see, the precise definition will vary somewhat from country to country. Nevertheless, the intention is identical in all three cases: to identify employment that lacks social/legal protections and can be considered to be relatively unregulated.

We use the data from the labour force survey to identify this category of informal employment (or, in the case of the Philippines, the informal employment supplement that asks questions of paid employees).

NEED TO SAY SOMETHING ABOUT THE DATA SOURCES/SURVEYS

The survey questionnaires discussed in this section include:

Box 1. Examples of Social and Legal Protection Indicators: Payments to pension scheme, provident fund, or government social security

o Sri Lanka (Question 11) o Philippines (Question 8) o Mongolia (Question 78a)

Entitled to paid leave

o Sri Lanka (Question 12) o Philippines (Questions 9 & 10) o Mongolia (Question 78g)

Legal entitlement to benefits/compensation in case of termination

o Philippines (Question 13) o Mongolia (Question 78h)

Existence of a written contract

o Philippines (Question 7) o Mongolia (Question 77)

Existence of a pay slip

o Philippines (Question 27) o Mongolia (Question 76)

8

The Philippines: The Informal Sector Survey, ISS (2009), Phase I3 and Phase II4 (Phase II collects information on household enterprises).

Mongolia: Labour Force Survey (2007/8)5 and the Survey on Household Unincorporated Enterprises and Informal Sector (2007/8)6.

Sri Lanka: Survey Module on Household Unincorporated Enterprises Having Market Output (2008/9), Phase I7 and Phase II8. The survey questionnaires contain a number of variables that could be used as

indicators of the existence or lack of social protection. Box 1 summarizes some of the relevant variables. The variables fall into two broad categories: indicators of social protections (pensions, government social security, and paid leave) and indicators of legal protections (legal entitlement to severance benefits, existence of a contract, and existence of a pay slip).

Since the definition of informal employment is a jobs-based concept, the social protection indicators used to define informal paid employment must be linked to employment. However, not all countries provide social protections in the same way and the degree to which particular social protections are tied to employment varies. To give a concrete example: in some countries, access to health insurance or health benefits is provided primarily through employment. In other cases, access to health care does not depend on employment. Therefore, the appropriateness of using ‘health benefits’ as an indicator of informality will differ from country to country. For this reason, definitions of informal wage employment often focus on social protections which are automatically linked to employment. For example, access to paid sick leave is, by its very nature, tied to employment. Pensions often fall into a similar category. The appropriateness of an indicator of informality may also be influenced by the nature of the ‘social contract’ – i.e. what social protections are expected in a given society. Lack of paid maternity leave may be an indicator of informality for some countries in which this social protection is expected. In cases where maternity leave is uncommon, using this criterion could lead to the vast majority of employment being defined as informal (even if other social protections are reasonably strong). In addition, the use of legal protections to define informal employment may not be appropriate in all cases. Specifically, the appropriateness of these criteria depends on whether individuals can realize their legal rights and protections – i.e. whether the rights and protections are truly enforceable. Although the existence of a written contract should provide some degree of legal protection, these protections become meaningless if the contract cannot be enforced. In cases where the issue of enforcement is ambiguous or

3 http://www.unescap.org/stat/isie/project-resources/questionnaires/ISS-Form1-PHL.pdf 4 http://www.unescap.org/stat/isie/project-resources/questionnaires/ISS-Form2-PHL.pdf 5 http://www.unescap.org/stat/isie/project-resources/questionnaires/Mongolia-LFS-questionnaire.xls 6 http://www.unescap.org/stat/isie/project-resources/questionnaires/Questionnaire-on-HUEMs-Mongolia.doc 7 http://www.unescap.org/stat/isie/project-resources/questionnaires/Phase1-Sri-Lanka.pdf 8 http://www.unescap.org/stat/isie/project-resources/questionnaires/Phase2-Sri-Lanka.pdf

9

questionable, the use of legal protection variables may not accurately capture the true extent of informal wage employment. In these circumstances, social protection criteria are preferred.

Given these considerations, a basic applied definition which is consistent with other commonly used definitions of informal employment is:

Formal paid employees: either the employer makes contributions to pension/social security or the employee has access to paid leave.

Informal paid employees: no contributions to pension/social security, nor paid leave (i.e. neither of the two social protections apply).

The specific questions from the labour force survey for each country are listed in Box 1. These criteria were used to generate estimates of informal paid employees for Philippines and Mongolia in the analyses presented later in this report. Defining informal self-employment

As we have discussed, informal self-employment (own-account workers and employers) is defined by the nature of the enterprise. In the case of the three countries – Sri Lanka, Philippines, and Mongolia – it is possible to combine information from the supplemental household enterprise modules with the main labour force survey to identify informal enterprises. This can improve the accuracy of the estimates – particularly when information on the nature of the enterprise is sketchy in the main labour force survey. However, this should only be done when the two parts of the survey can be matched precisely.

Box 2. Variables for identifying informal enterprises/informal self-employment. Legal form of organization

o Sri Lanka (Question PI04 – Household enterprise module only) o Philippines (Question 17 – Informal sector survey) o Mongolia (Question 63 – Labour force survey)

Formal accounts o Sri Lanka (Question 15 – Labour force survey) o Philippines (Questions 25 and 26) o Mongolia (Question 65)

Registration o Sri Lanka (Question 14 – Labour force survey) o Philippines (Question 23) o Mongolia (Question 69)

10

Box 2 summarizes the variables which could be used to define informal enterprises, the informal sector, and informal self-employment. In some cases, missing variables or missing observations make a complete definition of informal enterprises difficult. In such cases, a subset of the above information can be used to classify informal self-employment.

For the estimates presented in this report, an enterprise is considered to be informal if:

it is unincorporated (i.e. the legal form of organization is not a corporation) it does not maintain formal accounts (independent of the household) it is not registered

The self-employed are classified as informal if the enterprise in which they work is informal. c. Defining total informal employment and employment in the informal sector Total informal employment is the sum of :

Informal paid employees Informal self employment (own-account & employers) All unpaid contributing family workers All individuals employed producing goods exclusively for own-consumption

Employment in the informal sector is a different concept from total informal

employment. Recall the informal sector is made up of all informal enterprises. Similarly, the formal sector includes all formal enterprises. The formal sector also includes activities that take place in formal institutions that are not enterprises (e.g. the public sector). Informal enterprises are defined using the identical guidelines discussed above for informal self-employment. Therefore, employment in the informal sector includes:

- paid employees that work in informal enterprises - the informal self-employed - unpaid contributing family workers in informal enterprises.

III. Estimates of informal employment: the Philippines and Mongolia In this section, we present and discuss estimates of informal employment for the Philippines and Mongolia. For Mongolia, the estimates are based on data from the 2007/8 Labour Force Survey and the 2007/8 Phase II questionnaire on Household Unincorporated Enterprises and Informal Sector. For the Philippines, the estimates are based on data from Phase I and Phase II of the 2009 Informal Sector Survey.

11

a. The labour force and the structure of employment: an overview

Table 1 presents a broad profile of the labour force and the structure of employment for the Philippines. The working age population (defined as age 15+) totals 57.7 million of which 37.8 million people are economically active. There are significant differences in the labour force participation rates of men (81.4 percent) and women (49.8 percent). As a result, men’s employment exceeds women’s employment by about 8 million individuals, although the male working age population is roughly equivalent to the female working age population. Unemployment rates of men and women are approximately equal. [Table 1 about here] Agricultural employment (including forestry and fishing) accounts for slightly less than a third of total employment and the majority of agricultural employment is informal. On average, employed men are more likely to work in agricultural activities than employed women. A higher percentage of employed women work in formal non-agricultural jobs (33.3 percent) than employed men (26.7 percent). This is somewhat unusual compared to countries in other regions (see, for example, Chen et al. 2005). Three factors would contribute to this outcome: (1) the importance of the public sector as a source of formal employment for women, (2) the larger number of men employed in agriculture (which reduces their relative employment in non-agricultural jobs), and (3) the low labor force participation rate of women (i.e. the women who report being economically active may be better educated or more highly skilled, and therefore more likely to work in formal jobs on average). Women’s emigration for employment purposes could also contribute to this pattern (e.g. if women seek employment abroad as an alternative to informal employment at home) – although we cannot draw firm conclusions from these estimates alone. Outside of agriculture, informal employment accounts for a larger share of total employment than formal employment for both men and women, with about 56 percent of non-agricultural informal employment located in urban areas. Table 2 presents similar estimates for Mongolia. Mongolia has a working age population (age 15+) of just under two million (1.9 million). The labour force participation rate for men is 63.7 percent and 54.5 percent for women. Therefore, women’s labour force participation rate is lower than men’s, but the gap is not as large as in the case of the Philippines. Men’s unemployment rate is somewhat higher than women’s – 6.2 percent compared to 5.4 percent. [Table 2 about here] Over 40 percent of total employment is in agriculture and approximately 80 percent of agricultural employment is informal. Agricultural employment accounts for a slightly larger share of men’s employment compared to women’s. Outside of agriculture, total formal employment is larger than informal employment. Again – the public sector

12

plays a significant role in providing formal jobs – public employment accounts for about half of all formal, non-agricultural jobs. As in the Philippines, women are more likely to have formal jobs outside of agriculture than are men. The vast majority of non-agricultural informal employment is located in urban areas. b. Informal employment by employment status, urban/rural, and sex Table 3 presents estimates of the distribution of employment in the Philippines by sex, formal/informal, and employment status. The estimates are further disaggregated into ‘agricultural’ and ‘non-agricultural’ employment. For men employed in agriculture, the largest share work as informal own-account workers. Wage employment accounts for 29.8 percent of men’s agricultural employment, and most of this is informal employment (i.e. lacking social protections). For women, the distribution of employment differs significantly. About half (49.8 percent) of women’s agricultural employment is as (unpaid) contributing workers on family farms/plots. Own-account employment and employment as paid employees in agriculture is less common for women than it is for men. [Table 3 about here] Outside of agriculture, wage employment (as paid employees) is the most important employment status, accounting for 65.9 percent of men’s non-agricultural employment and 46.1 percent of women’s. In addition, 13.5 percent of women’s non-agricultural employment is as employees in private households (if these domestic workers are included in the total for wage employment, paid employees account for 59.6 percent of women’s non-agricultural employment). More men are employed as informal paid employees than are employed as formal paid employees. The opposite holds for women – formal wage employment is larger than informal wage employment. However, if we include domestic workers, formal and informal wage employment account for approximately equal shares of women’s non-agricultural employment. In addition, informal employment as own-account workers accounts for nearly 20 percent of women’s employment outside of agriculture. Table 4 presents similar estimates for Mongolia. In agricultural employment, the distinction between men’s and women’s employment with regard to employment status is particularly stark. Self-employment as own-account workers accounts for 63.8 percent of men’s employment. Within agriculture, women are also concentrated in self-employment, but as contributing family workers. This category accounts for 81 percent of women’s employment in agriculture. Employment as agricultural employees is quite rare in Mongolia. [Table 4 about here] As in the Philippines, employment as paid employees is the single most important employment status outside of agriculture. Informal employment as own-account workers is less significant – for women, this employment category only accounts for 8.1 percent

13

of non-agricultural employment. As mentioned in the previous section, formal employment accounts for a large share of non-agricultural employment for both men and women – in part, due to the role of the public sector. Around the world, the urban population continues to grow faster than the rural population. This raises critical questions about urban livelihoods and employment. Therefore, it is useful to examine differences in the structure of urban employment relative to rural employment. Table 5 presents estimates of the distribution of urban and rural non-agricultural employment for the Philippines by employment status and sex. In urban settings, wage employment is the single most important form of employment. This is particularly true for men – accounting for 70.2 percent of all non-agricultural urban employment. For women, the story is more complicated, since one significant source of wage employment is work in private households (e.g. as domestic workers). Wage employment accounts for 50.8 percent of women’s urban employment outside of private households and employment as domestic workers (in private households) accounts for an additional 13.7 percent. Most of the wage employment available to women in private households is informal. [Table 5 about here]

In rural areas, informal employment is relatively more common as a share of total non-agricultural employment. This implies, not surprisingly, that formal non-agricultural employment is concentrated in urban areas. In rural areas, non-agricultural self-employment is also more common, relative to total non-agricultural employment, compared to urban areas. In rural areas, informal wage employment and informal own-account employment represent the two most important forms of non-agricultural employment for men. Women in rural areas have a similar structure of employment outside of agriculture, but it is important to recognize that, like urban areas, domestic work is an important source of informal wage employment. Table 6 presents a similar breakdown for Mongolia. For both men and women, employment as paid employees accounts for the largest share of urban, non-agricultural employment. Moreover, much of this employment is formal. The second most important category of employment is own-account workers – although this form of employment accounts for just 21.2 percent of men’s urban non-agricultural employment and 15.9 percent of women’s. In the case of own-account employment, informal employment accounts for a larger share of men’s urban employment than does formal employment, but this is not true for women. [Table 6 about here] Rural non-agricultural employment is relatively uncommon in Mongolia – with only about 23,000 men and 17,000 women employed in total. Therefore, rural employment in Mongolia is very much dominated by agriculture. The patterns observed with regard to rural non-agricultural employment are similar to those observed for urban non-agricultural employment – wage employment dominates (with a relatively large

14

share of formal employment) with own-account employment being a distant second in importance. Own-account employment is somewhat more common in rural areas compared to urban areas – similar to what we observe in the Philippines. As with urban Mongolia, informal own-account employment accounts for a larger share of men’s urban employment than does formal own-account employment, but again this is not true for women. c. Employment in the informal sector and informal employment In the discussion of the definitions used to estimate informal employment, we highlighted the distinction between informal employment and employment in the informal sector. Recall that employment in the informal sector is comprised of all employment in informal enterprises. Informal employment is defined as employment in informal jobs (and these jobs may be located in the informal sector, the formal sector, or in private households). Tables 7a and Table 7b presents estimates of formal and informal employment for the Philippines, disaggregated by employment status and formal/informal sector. Given the level of detail, it is helpful to treat agricultural employment separately from non-agricultural employment. Therefore, Table 7a presents estimates for agricultural employment and 7b for non-agricultural employment. [Tables 7a and 7b about here] As we have already noted, agricultural employment in the Philippines is dominated by informal employment. Table 7a shows that much of this employment is in the informal sector. Total agricultural employment for the formal sector (formal enterprises and farms) is 1,065,411 compared to total agricultural employment for the informal sector of 8,414,469 (of which 8,350,063 is also informal employment). Own-account workers and contributing family workers account for the bulk of agricultural employment in the informal sector, although there are an estimated 2,340,983 paid employees in the informal agricultural sector (the vast majority of which are also in informal jobs). Therefore, we can characterize agricultural employment in the Philippines as being highly informalized and dominated by small producers employed as own-account workers (the majority of whom are men) and contributing family workers (the majority of whom are women). There is also a significant agricultural wage labour force and much of this is employed by informal farms and agricultural enterprises (including fishing). Only about 327,000 individuals are paid employees hired by formal agricultural enterprises. The situation is quite different for non-agricultural employment (Table 7b). Employment in the formal sector exceeds employment in the informal sector. The majority of workers in the formal sector are paid employees in both government and private jobs. However, formal, non-agricultural self-employment as own-account workers

15

is also significant. In the informal sector, employment is split between paid employees (about 4,800,000 in total) and own-account workers plus contributing family workers (about 4,900,000 in total). As already noted, employment in private households accounts for about 1,420,000 informal jobs outside of both the formal and informal sectors. It is worth pointing out that there are a large number of informal paid employees in the formal sector (an estimated 1,680,406) but a significantly smaller number of formal employees in the informal sector (567,901). This asymmetry is typical of such estimates in other countries.

Tables 8a and Table 8b presents similar estimates for Mongolia. Again – Table 8a focuses on agricultural employment and Table 8b focuses on non-agricultural employment. Table 8a examines employment within and outside of all agricultural enterprises, while Table 8b specifically considers the informal and formal sectors. [Tables 8a and 8b about here] As in the case of the Philippines, agricultural employment is highly informalized. Paid employees are relatively uncommon. Therefore, informal self-employment (as own-account workers and contributing family workers) dominates agricultural employment. From our earlier discussion, there is a clear gender division in terms of employment status in agriculture – with men working as own-account workers and women working as contributing family members. We observed the same pattern with regard to the Philippines. Table 8a also contains estimates of agricultural production exclusively for own-use (i.e. production which is not sold or barter on markets). Such employment accounts for over a third (approximately 35 percent) of agricultural employment in Mongolia. Table 8b presents estimates for non-agricultural employment. In Mongolia, non-agricultural employment is concentrated in the formal sector. As we had observed earlier, the public sector plays an important role in providing formal sector jobs. Within the non-agricultural informal sector, self-employment as own-account workers and contributing family workers accounts for most of the employment. Paid employees are relatively uncommon in the informal sector. Informal paid employees also work in the formal sector, accounting for about 9 percent of total formal sector employment. In the Philippines, this share was larger (about 26 percent of formal sector jobs). Therefore, employment in Mongolia is largely characterized by formal wage employment in the formal sector (non-agricultural) and informal self-employment in the informal sector (both agricultural and non-agricultural). In this respect, Mongolia more closely represents a classic example of a dualist employment structure (e.g. Fields, 1975). d. Informal employment by sector of activity Table 9 presents estimates of informal employment by broad sector of activity for the Philippines. We have already noted the critical position of agriculture in the overall structure of employment. However, other activities are also significant. Employment in trade accounts for 17.4 percent of all informal employment. Trading activities are

16

particularly important for women’s informal employment, comprising 28.9 percent of women’s informal employment. Construction and manufacturing are other notable sectors for informal employment. Informal construction is clearly male-dominated, accounting for 10.9 percent of men’s total informal employment, but virtually none of women’s employment. Women in informal employment are somewhat more likely to work in manufacturing than are men. [Table 9 about here] Table 10 presents estimates of informal employment by sector for Mongolia. Informal employment by sector of activity is disaggregated further into urban and rural employment. As we have already noted, the vast majority of rural informal employment in Mongolia is in agriculture. Outside of agriculture, trading, manufacturing, and transportation are the most common sector of informal employment – but it is important to note that, due to the overwhelming importance of agriculture, such non-agricultural informal employment accounts for just 3.3 percent of total rural informal employment. In urban areas, trade, manufacturing, and transportation are more significant sectors. Women in informal employment tend to work in trade and manufacturing. This is similar to the case of the Philippines. For men, transportation, manufacturing, and construction are notable sectors. Trade is also an important source of employment for men in informal employment. [Table 10 about here]

IV. Employment in household enterprises The surveys for the Philippines and Mongolia also contain information on unincorporated household enterprises. Such enterprises are operated by one or more members of a household and they are not incorporated (i.e. their legal form of organization is something other than a corporate one). Many household enterprises are informal and therefore belong to the informal sector. However, household enterprises may be formal if they satisfy the relevant criteria. To give two examples: in the Philippines, employment in informal enterprises accounts for 72 percent of employment in all household enterprises. In Mongolia, more than half (55 percent) of all non-agricultural household enterprises are informal enterprises. Examining household enterprise data gives us additional information on the nature of employment which would not be available if we restricted our attention to the standard labour force survey questions.

The inclusion of a module on household enterprises is an important and innovative way of collecting information on both households and enterprises using a single instrument – typically enterprise surveys are conducted separately from household surveys. Nevertheless, the household survey module is not a substitute for an enterprise survey, since the modules only capture a subset of the enterprises that exist (specifically – household unincorporated enterprises).

17

Here we present some estimates based on the household enterprise data for the

Philippines and Mongolia. Our primary focus in this section is non-agricultural household enterprises (with a lesser focus on informal employment and employment in the informal sector – which has been detailed at some length in the previous section of the report. Table 11 presents an overview of the size of household enterprises for both countries. Size is measured by the number of paid employees. The vast majority of these enterprises in both the Philippines and Mongolia are quite small: having 2 employees or less. It is quite unusual for a household enterprise to have 3 or more paid employees (accounting for less than 5 percent of all enterprises). Often the term ‘microenterprise’ is applied to firms with 5 or fewer employees. These estimates make it clear that most household enterprises in the two countries are microenterprises – and small microenterprises at that. [Table 11 about here]

Table 12 shows the distribution of non-agricultural household enterprises in the Philippines by sector of activity. Over half of all household enterprises are engaged in some form of trade. After trade, small-scale manufacturing and transportation services are next in importance. There is a clear difference in the types of activities in which male-operated enterprises are engaged compared to female-operated enterprises. Transportation, trade, and construction account for the largest shares of male-operated enterprises. Trade is by far the most important sector for female-operated enterprises – with small-scale manufacturing and personal services being the next most important sectors, albeit with much lower shares of the total.

[Table 12 about here] Table 13 presents similar estimates for Mongolia. A similar pattern emerges. Overall, the most important sectors for household enterprises are trade, transportation, and mining/manufacturing. Female-operated enterprises are dominated by trading activities, just as in the case of the Philippines. Mining/manufacturing and ‘other services’ are next in importance (but significantly less prevalent than enterprises engaged in trading). Male-operated enterprises are concentrated in mining/manufacturing, trade, and transportation services. [Table 13 about here] Table 14 examines the interaction of enterprise size and sector of activity for the Philippines. For the smallest enterprises (0 to 2 paid employees), trade, transportation, and manufacturing have the largest shares of the total. As the size of the enterprise increases, trading activities become less important and other sectors become more prominent. Manufacturing accounts for a larger share of enterprises with 3 to 5 employees compared to enterprises with only 0 to 2 employees. Construction, business services, and hotels/restaurants are much more common among the larger household enterprises (and relatively uncommon among the smallest enterprises).

18

[Table 14 about here] Table 15 presents parallel estimates for Mongolia. Unfortunately, information on the sector of activity and the size of the enterprises is not well captured in this data. No information is available for the larger household enterprises. The majority of the smaller enterprises have been grouped as ‘other activities/unclassified’. Therefore, we cannot present a similar comparison for Mongolia. [Table 15 about here] Although we do not have information on the intersection between enterprise size and sector of activity, the Mongolian survey does contain other, interesting information on household enterprises. For example, Table 16 presents information on household enterprises by the location of operation. Trading activities dominate household enterprises in Mongolia, so it is not surprising that the most common location is some permanent premises for trade, such as a shop or a permanent market. Mobile enterprises – operated out of a vehicle, a cart, a wheelbarrow, etc. – are relatively common as is operating the enterprise from one’s own home. However, when the enterprise is located with the residence itself, it is common to find that some alterations have been made to accommodate the business activity. [Table 16 about here] Household enterprises face numerous constraints that can limit their productivity and earnings. The Mongolian survey of informal employment collects data on the challenges which household enterprises face. Respondents are asked whether certain potential problems are an issue for them. Table 17 summarizes these responses in terms of the percentage of all household enterprises which report having problems in a particular area. The responses are tabulated separately for formal and informal enterprises. [Table 17 about here] For household enterprises in Mongolia, the most common problem concerns demand in the local markets. The two most frequently reported problems both relate to difficulties in selling products due to market conditions. The problems with market demand are divided into two categories. The first is a lack of customers (or the lack of a big enough market). Two factors most likely contribute to this problem: (1) a lack of purchasing power among potential consumers (i.e. a lack of effective demand) and (2) a lack of market access (i.e. effective demand is there, but the household enterprise cannot access the market for some reason). The second is an abundance of competition: there are a large number of small traders competing for the same limited market. A smaller proportion of informal household enterprises report problems relative to formal enterprises. It is often assumed that informal enterprises face fewer barriers to

19

entry and operation than formal enterprises. This may help explain the smaller share of informal enterprises reporting specific problems compared to formal enterprises.

The one exception to this observation is the problem of a lack of equipment. A larger proportion of informal enterprises report this as a problem compared to formal enterprises. This could indicate that informal enterprises have less capital to work with and are unable to invest in capital goods due to a lack of resources, limited credit, or some other constraint. One theory of the informal sector is that household enterprises chose to operate informally to avoid excessive regulatory burdens (i.e. informality is freely chosen). This does not appear to be the case for Mongolia. Regulatory barriers and taxes are not a commonly cited problem. Moreover, formal household enterprises report this being a problem at a slightly higher proportion than informal enterprises (14.5 percent compared to 11.1 percent).

V. Conclusions This report has demonstrated how informal employment may be measured and defined using existing household survey data for three countries – the Philippines, Mongolia, and Sri Lanka. In so doing, we reviewed the international guidelines for defining informal employment (including employment in the informal sector) and showed how these recommendations could be applied to specific variables for each of the three countries. For two of the countries – the Philippines and Mongolia – we presented actual estimates of informal employment and employment in the informal sector. In so doing, we tried to demonstrate how a rich analysis of the structure of employment could be generated and how such analysis could be used to provide new insights in terms of the varied nature of employment in these countries. In addition, we also specifically profiled unincorporated household enterprises – an import source of livelihoods in these countries that has a close relationship with the concept of the informal sector. This was not meant to be an exhaustive analysis of informal employment in these countries. Rather, it represents an initial step to demonstrate how the international definitions can be applied and what we potential can learn by doing so. It is hoped that this exercise will lead to more in-depth work in the future to build our understanding of the nature and dynamics of employment in the Asia and Pacific region.

References Chen, M., J. Vanek, F, Lund, J. Heintz, R. Jhabvala, and C. Bonner, (2005). Progress of the World’s Women 2005: Women, Work, and Poverty, New York: UNIFEM.

Fields, Gary (1975). ‘Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs’ Journal of Development Economics, 2(2): 165-87.

20

Hussmanns, Ralf (2004a). “Statistical definition of informal employment: guidelines endorsed by the 17th International Conference of Labour Statisticians.” Paper prepared for the 7th Meeting of the Expert Group on Informal Sector Statistics (Delhi Group)

21

Table 1. Population, labour force, and employment, Philippines, 2009.

Men Women Total

Total population 45,262,857 44,753,450 90,016,307 Working age (15+) 28,710,662 28,988,893 57,699,555

Not economically active 5,337,718 14,550,116 19,887,834Economically active 23,372,944 14,438,777 37,811,721Labour force participation rate (%) 81.4% 49.8% 65.5% Unemployed 2,599,258 1,677,261 4,276,519 Unemployment rate (%) 11.1% 11.6% 11.3% Employed 20,773,686 12,761,516 33,535,202

Employed in agriculture 7,577,777 2,872,729 10,450,506Informal agricultural employment 6,690,608 2,731,833 9,422,441

Employed non agricultural 13,195,909 9,888,787 23,084,696Formal non-ag. employment 5,548,236 4,253,165 9,801,401

Public formal non-ag. employ. 928,394 1,028,130 1,956,525Informal non-ag. employment 7,647,673 5,635,622 13,283,295

Urban informal non-ag. employ. 4,225,783 3,237,144 7,462,927

Employed in agriculture 36.5% 22.5% 31.2% Informal agricultural employment 32.2% 21.4% 28.1%Employment, non-agricultural 63.5% 77.5% 68.8% Formal non-ag employment 26.7% 33.3% 29.2% Public formal non-ag-employment 4.5% 8.1% 5.8% Informal non-agricultural employment 36.8% 44.2% 39.6% Urban informal non-ag. employment 20.3% 25.4% 22.3% Rural informal non-ag. employment 16.5% 18.8% 17.4%TOTAL EMPLOYMENT 100.0% 100.0% 100.0%

Share of total employment

Source: The Informal Sector Survey, ISS (2009), Phase I (Philippines). Estimates produced by ESCAP Statistics Division

22

Table 2. Population, labour force, and employment, Mongolia, 2007/8.

Men Women Total

Total population 1,306,683 1,334,535 2,641,218 Working age (15+) 949,428 990,812 1,940,240

Not economically active 345,103 450,830 795,933

Economically active 604,325 539,982 1,144,307Labour force participation rate (%) 63.7% 54.5% 59.0% Unemployed 37,207 29,040 66,247 Unemployment rate (%) 6.2% 5.4% 5.8% Employed 567,118 510,942 1,078,060

Employed in agriculture 239,686 201,586 441,272Informal agricultural employment 171,002 187,362 358,363

Employed non agricultural 327,432 309,356 636,788Formal non-agricultural employment 232,848 236,168 469,016

Public formal non-ag. employment 110,165 125,742 235,906Informal non-agricultural employment 94,584 73,188 167,772

Urban informal non-ag. employment 87,101 68,680 155,782

Employed in agriculture 42.3% 39.5% 40.9% Informal agricultural employment 30.2% 36.7% 33.2%Employment, non-agricultural 57.7% 60.5% 59.1% Formal non-ag employment 41.1% 46.2% 43.5% Public formal non-ag-employment 19.4% 24.6% 21.9% Informal non-agricultural employment 16.7% 14.3% 15.6% Urban informal non-ag, 15.4% 13.4% 14.5% Rural informal non-ag. 1.3% 0.9% 1.1%TOTAL EMPLOYMENT 100.0% 100.0% 100.0%

Share of Total Employment

Source: Mongolia Labour Force Survey (2007/8). Estimates produced by ESCAP Statistics Division

23

Table 3. Employment by employment status and sex (agricultural and non-agricultural), Philippines, 2009.

Total 7,577,777 100.0% 2,872,729 100.0% 13,195,909 100.0% 9,888,787 100.0%Formal 887,169 11.7% 140,896 4.9% 5,548,236 42.0% 4,253,165 43.0%Informal 6,690,608 88.3% 2,731,833 95.1% 7,647,673 58.0% 5,635,622 57.0%Total 2,261,683 29.8% 640,898 22.3% 8,696,007 65.9% 4,553,865 46.1%Formal 235,830 3.1% 63,979 2.2% 3,728,051 28.3% 2,951,618 29.8%Informal 2,025,852 26.7% 576,920 20.1% 4,967,956 37.6% 1,602,248 16.2%Total 781,101 10.3% 116,750 4.1% 421,811 3.2% 224,411 2.3%Formal 188,190 2.5% 29,168 1.0% 325,281 2.5% 173,113 1.8%Informal 592,911 7.8% 87,582 3.0% 96,530 0.7% 51,298 0.5%Total 3,220,658 42.5% 683,079 23.8% 3,238,892 24.5% 2,923,955 29.6%Formal 463,148 6.1% 47,749 1.7% 1,448,229 11.0% 1,023,990 10.4%Informal 2,757,510 36.4% 635,330 22.1% 1,790,664 13.6% 1,899,965 19.2%

Contributing family Informal 1,314,336 17.3% 1,432,001 49.8% 600,493 4.6% 853,274 8.6%Total --- --- --- --- 238,707 1.8% 1,333,283 13.5%Formal --- --- --- --- 46,676 0.4% 104,445 1.1%Informal --- --- --- --- 192,031 1.5% 1,228,838 12.4%

Wage employees

Employers

Own-account

Pvt. households

Agricultural Non-agricultural

Total

Male Female Male Female

Source: The Informal Sector Survey, ISS (2009), Phase I (Philippines). Estimates produced by ESCAP Statistics Division.

24

Table 4. Employment by employment status and sex (agricultural and non-agricultural), Mongolia, 2007/8.

Total 239,686 100.0% 201,586 100.0% 327,432 100.0% 309,356 100.0%Formal 68,684 28.7% 14,225 7.1% 232,848 71.1% 236,168 76.3%Informal 171,002 71.3% 187,362 92.9% 94,585 28.9% 73,188 23.7%Total 4,774 2.0% 2,165 1.1% 216,754 66.2% 222,503 71.9%Formal 2,238 0.9% 1,534 0.8% 191,312 58.4% 195,324 63.1%Informal 2,536 1.1% 632 0.3% 25,442 7.8% 27,179 8.8%Total 411 0.2% 0 0.0% 31,190 9.5% 19,755 6.4%Formal 411 0.2% 0 0.0% 19,566 6.0% 14,457 4.7%Informal 0 0.0% 0 0.0% 11,624 3.6% 5,298 1.7%Total 152,978 63.8% 35,990 17.9% 70,842 21.6% 50,698 16.4%Formal 66,035 27.6% 12,691 6.3% 21,604 6.6% 25,506 8.2%Informal 86,943 36.3% 23,299 11.6% 49,238 15.0% 25,191 8.1%

Contributing family Informal 81,439 34.0% 163,213 81.0% 6,072 1.9% 14,270 4.6%Other self Informal 84 0.0% 219 0.1% 2,574 0.8% 2,131 0.7%

Agriculture Non-agricultureMale Female Male Female

Total

Wage employees

Employers

Own-account


25

Table 5. Urban and rural employment by employment status and sex, Philippines, 2009.

Total 8,162,400 100.0% 6,238,253 100.0% 5,033,509 100.0% 3,650,534 100.0%Formal 3,936,618 48.2% 3,001,110 48.1% 1,611,619 32.0% 1,252,056 34.3%Informal 4,225,783 51.8% 3,237,144 51.9% 3,421,890 68.0% 2,398,478 65.7%Total 5,727,975 70.2% 3,169,271 50.8% 2,968,031 59.0% 1,384,594 37.9%Formal 2,823,931 34.6% 2,201,458 35.3% 904,119 18.0% 750,160 20.5%Informal 2,904,044 35.6% 967,813 15.5% 2,063,912 41.0% 634,435 17.4%Total 285,278 3.5% 167,832 2.7% 136,533 2.7% 56,579 1.5%Formal 232,700 2.9% 133,720 2.1% 92,581 1.8% 39,393 1.1%Informal 52,578 0.6% 34,112 0.5% 43,953 0.9% 17,186 0.5%Total 1,692,656 20.7% 1,568,448 25.1% 1,546,236 30.7% 1,355,507 37.1%Formal 843,854 10.3% 592,431 9.5% 604,375 12.0% 431,559 11.8%Informal 848,803 10.4% 976,017 15.6% 941,861 18.7% 923,948 25.3%

Cont. family Informal 294,814 3.6% 475,660 7.6% 305,678 6.1% 377,614 10.3%Total 161,677 2.0% 857,043 13.7% 77,030 1.5% 476,240 13.0%Formal 36,133 0.4% 73,500 1.2% 10,544 0.2% 30,945 0.8%Informal 125,544 1.5% 783,542 12.6% 66,487 1.3% 445,295 12.2%

Pvt. households

Total

Wage employees

Employers

Own-account

Urban, non-ag. Rural, non-agMale Female Male Female

Source: The Informal Sector Survey, ISS (2009), Phase I (Philippines). Estimates produced by ESCAP Statistics Division.

26

Table 6. Urban and rural employment by employment status and sex, Mongolia, 2007/8.

Total 304,084 100.0% 292,403 100.0% 23,349 100.0% 16,953 100.0%Formal 217,557 71.5% 224,603 76.8% 15,291 65.5% 11,566 68.2%Informal 86,528 28.5% 67,800 23.2% 8,057 34.5% 5,388 31.8%Total 202,952 66.7% 212,108 72.5% 13,802 59.1% 10,395 61.3%Formal 179,012 58.9% 186,503 63.8% 12,300 52.7% 8,821 52.0%Informal 23,940 7.9% 25,605 8.8% 1,502 6.4% 1,574 9.3%Total 28,891 9.5% 19,139 6.5% 2,299 9.8% 617 3.6%Formal 18,465 6.1% 13,927 4.8% 1,101 4.7% 531 3.1%Informal 10,426 3.4% 5,212 1.8% 1,198 5.1% 86 0.5%Total 64,332 21.2% 46,448 15.9% 6,510 27.9% 4,250 25.1%Formal 19,506 6.4% 23,293 8.0% 2,098 9.0% 2,214 13.1%Informal 44,826 14.7% 23,155 7.9% 4,412 18.9% 2,035 12.0%

Contributing family Informal 5,427 1.8% 12,871 4.4% 645 2.8% 1,398 8.2%Other self Informal 2,482 0.8% 1,837 0.6% 92 0.4% 294 1.7%

Total

Wage employees

Employers

Own-account

Urban, non-ag. Rural, non-ag.Male Female Male Female


27

Table 7a. Agricultural employment by employment status and formal/informal sector, Philippines, 2009.

Total 10,450,506 100.0% 1,065,411 100.0% 8,414,469 100.0% 970,626 100.0%Formal 1,028,065 9.8% 946,616 88.8% 64,406 0.8% 17,042 1.8%

Informal 9,422,441 90.2% 118,795 11.2% 8,350,063 99.2% 953,583 98.2%

Total 2,902,581 27.8% 332,551 31.2% 2,367,307 28.1% 202,723 20.9%Formal 299,809 2.9% 218,361 20.5% 64,406 0.8% 17,042 1.8%Informal 2,602,772 24.9% 114,191 10.7% 2,302,901 27.4% 185,680 19.1%

Total 2,870,738 27.5% 327,494 30.7% 2,340,983 27.8% 202,261 20.8%Formal 296,454 2.8% 215,006 20.2% 64,406 0.8% 17,042 1.8%Informal 2,574,284 24.6% 112,489 10.6% 2,276,576 27.1% 185,219 19.1%

Total 4,672 0.0% 4,672 0.4% --- --- --- ---Formal 2,970 0.0% 2,970 0.3% --- --- --- ---Informal 1,702 0.0% 1,702 0.2% --- --- --- ---

Total 27,171 0.3% 385 0.0% 26,324 0.3% 462 0.0%Formal 385 0.0% 385 0.0% --- --- --- ---Informal 26,786 0.3% --- --- 26,324 0.3% 462 0.0%

Total 897,851 8.6% 217,358 20.4% 651,977 7.7% 28,515 2.9%Formal 217,358 2.1% 217,358 20.4% --- --- --- ---Informal 680,493 6.5% --- --- 651,977 7.7% 28,515 2.9%

Total 3,903,737 37.4% 510,897 48.0% 2,975,599 35.4% 417,241 43.0%Formal 510,897 4.9% 510,897 48.0% --- --- --- ---Informal 3,392,840 32.5% --- --- 2,975,599 35.4% 417,241 43.0%

Cont. family Informal 2,746,337 26.3% 4,604 0.4% 2,419,586 28.8% 322,147 33.2%

Own-account

Public sector

Paid worker, household enterprise

All agriculture

Employers

Informal sectorAll Agriculture Formal sectorTOTAL EMPLOYMENT

PAID EMPLOYEES

SELF-EMPLOYED

Other/own-use

All employees

Pvt. enterprises


28

Table 7b. Non-agricultural employment by employment status and formal/informal sector, Philippines, 2009.

Total 23,084,696 100.0% 12,065,270 100.0% 9,825,179 100.0% 1,194,247 100.0%Formal 9,801,401 42.5% 8,939,365 74.1% 567,901 5.8% 294,135 24.6%Informal 13,283,295 57.5% 3,125,905 25.9% 9,257,278 94.2% 900,112 75.4%

Total 13,249,872 57.4% 7,498,038 62.1% 4,793,567 48.8% 958,266 80.2%Formal 6,679,668 28.9% 5,817,632 48.2% 567,901 5.8% 294,135 24.6%Informal 6,570,203 28.5% 1,680,406 13.9% 4,225,666 43.0% 664,131 55.6%Total 10,487,765 45.4% 4,826,552 40.0% 4,706,374 47.9% 954,839 80.0%Formal 4,700,401 20.4% 3,853,188 31.9% 553,844 5.6% 293,369 24.6%Informal 5,787,364 25.1% 973,364 8.1% 4,152,530 42.3% 661,470 55.4%Total 2,662,621 11.5% 2,662,621 22.1% --- --- --- ---Formal 1,956,525 8.5% 1,956,525 16.2% --- --- --- ---Informal 706,096 3.1% 706,096 5.9% --- --- --- ---Total 99,486 0.4% 8,865 0.1% 87,193 0.9% 3,428 0.3%Formal 22,742 0.1% 7,919 0.1% 14,057 0.1% 766 0.1%Informal 76,744 0.3% 946 0.0% 73,136 0.7% 2,661 0.2%

Total 646,222 2.8% 498,393 4.1% 132,122 1.3% 15,707 1.3%Formal 498,393 2.2% 498,393 4.1% --- --- --- ---Informal 147,829 0.6% --- --- 132,122 1.3% 15,707 1.3%Total 6,162,847 26.7% 2,472,219 20.5% 3,491,105 35.5% 199,524 16.7%Formal 2,472,219 10.7% 2,472,219 20.5% --- --- --- ---Informal 3,690,628 16.0% --- --- 3,491,105 35.5% 199,524 16.7%

Cont. family Informal 1,453,766 6.3% 24,630 0.2% 1,408,385 14.3% 20,751 1.7%Total 1,571,990 6.8% --- --- --- --- --- ---Formal 151,122 0.7% --- --- --- --- --- ---Informal 1,420,869 6.2% --- --- --- --- --- ---

All Formal sector Informal sector Other/own-useTOTAL EMPLOYMENT

PAID EMPLOYEES

SELF-EMPLOYED

Paid worker, household enterprise

Employers

Own-account

Private households

Total non-agricultural

All employees

Private establishment/corpo

ration

Public sector

29

Table 8a. Agricultural employment by employment status (enterprises v. own-use), Mongolia, 2007/8.

Total 441,272 100.0% 283,568 100.0% 157,704 100.0% 2,035 100.0%Formal 82,909 18.8% 82,909 29.2% --- --- --- ---

Informal 358,363 81.2% 200,659 70.8% 157,704 100.0% --- ---

Total 6,940 1.6% 6,078 2.1% 862 0.5% --- ---Formal 3,772 0.9% 3,772 1.3% --- --- --- ---Informal 3,168 0.7% 2,306 0.8% 862 0.5% --- ---

Formal 411 0.1% 411 0.1% --- --- --- ---Informal --- --- --- --- --- --- --- ---Formal 78,726 17.8% 78,726 27.8% --- --- --- ---Informal 110,241 25.0% 60,430 21.3% 49,812 31.6% --- ---

Cont. family Informal 244,651 55.4% 137,621 48.5% 107,031 67.9% --- ---Other self Informal 303 0.1% 303 0.1% --- --- --- ---

All agriculture Enterprises

PAID EMPLOYEES

Paid employees

SELF-EMPLOYED

Own-use OtherTOTAL EMPLOYMENT

Total employment

Employers

Own-account


30

Table 8b. Non-agricultural employment by employment status and formal/informal sector, Mongolia 2007/8.

Total 636,788 100.0% 529,965 100.0% 92,797 100.0% 14,027 100.0%Formal 469,016 73.7% 469,016 88.5% 0 0.0% --- ---

Informal 167,772 26.3% 60,948 11.5% 92,797 100.0% 14,027 100.0%

Total 439,257 69.0% 435,041 82.1% 2,049 2.2% 2,166 15.4%Formal 387,883 60.9% 387,883 73.2% 0 0.0% --- ---Informal 51,374 8.1% 47,159 8.9% 2,049 2.2% 2,166 15.4%

Formal 34,023 5.3% 34,023 6.4% --- --- ---Informal 16,922 2.7% --- --- 16,922 18.2% --- ---Formal 47,111 7.4% 47,111 8.9% --- --- --- ---Informal 74,429 11.7% --- --- 66,122 71.3% 8,307 59.2%

Cont. family Informal 20,342 3.2% 9,503 1.8% 7,498 8.1% 3,341 23.8%Other self Informal 4,705 0.7% 4,286 0.8% 206 0.2% 213 1.5%

Employers

Own-account

All Formal sector Informal sector Own-use

Paid employees

SELF-EMPLOYED

TOTAL EMPLOYMENT

Total employment

PAID EMPLOYEES


31

Table 9. Informal employment by sex and sector of activity, Philippines, 2009.

Male % Female % Total %

Informal employment (all) 14,338,281 100.0% 8,367,455 100.0% 22,705,736 100.0%Informal employment (non-ag.) 7,647,673 53.3% 5,635,622 67.4% 13,283,295 58.5%Informal traders (non-ag, all) 1,529,308 10.7% 2,417,542 28.9% 3,946,849 17.4%…of which: Street traders 344,033 2.4% 398,058 4.8% 742,091 3.3%Informal transportation 1,221,569 8.5% 30,358 0.4% 1,251,928 5.5%Informal construction 1,560,055 10.9% 12,977 0.2% 1,573,033 6.9%Informal manufacturing 795,834 5.6% 698,532 8.3% 1,494,365 6.6% Source: The Informal Sector Survey, ISS (2009), Phase I (Philippines). Estimates produced by ESCAP Statistics Division

32

Table 10. Urban and rural informal employment by sex and sector of activity, Mongolia, 2007/8.

Men % Women % Total %

Informal employment (all) 265,586 100.0% 260,549 100.0% 526,135 100.0%…. Urban 120,046 100.0% 97,220 100.0% 217,265 100.0%…. Rural 145,906 100.0% 164,210 100.0% 310,116 100.0%Informal employment (non-ag.) 94,584 35.6% 73,188 28.1% 167,772 31.9%…. Urban 86,528 72.1% 67,800 69.7% 154,328 71.0%…. Rural 8,057 5.5% 5,388 3.3% 13,445 4.3%Informal traders (non-ag.) 16,417 6.2% 30,375 11.7% 46,792 8.9%… Urban 15,266 12.7% 28,598 29.4% 43,864 20.2%… Rural 1,152 0.8% 1,777 1.1% 2,928 0.9%Informal transport 26,085 9.8% 2,572 1.0% 28,657 5.4%……..Urban 24,737 20.6% 2,484 2.6% 27,222 12.5%……..Rural 1,347 0.9% 88 0.1% 1,436 0.5%Informal construction 13,420 5.1% 4,057 1.6% 17,477 3.3%….Urban 12,769 10.6% 3,850 4.0% 16,620 7.6%….Rural 651 0.4% 207 0.1% 857 0.3%Informal manufacturing 23,119 8.7% 16,025 6.2% 39,144 7.4%….Urban 19,744 16.4% 13,930 14.3% 33,674 15.5%….Rural 3,375 2.3% 2,095 1.3% 5,470 1.8%Informal other (non-ag.) 15,543 5.9% 20,159 7.7% 35,702 6.8%….Urban 14,012 11.7% 18,937 19.5% 32,949 15.2%….Rural 1,532 1.0% 1,222 0.7% 2,754 0.9% Source: Mongolia Labour Force Survey (2007/8). Estimates produced by ESCAP Statistics Division Individual components may not sum exactly to subtotals.

33

Table 11. Unincorporated household enterprises by number of paid employees, Philippines (2009) and Mongolia (2007/8).

Number of paid employees Philippines % Mongolia %0 to 2 10,099,707 95.3% 146,694 97.4%3 to 5 291,406 2.7% 3,429 2.3%6 to 7 84,957 0.8% 324 0.2%8 or more 122,445 1.2% 237 0.2%TOTAL 10,598,516 100.0% 150,684 100.0% Source: The Informal Sector Survey, ISS (2009), Phase II (Philippines) and Mongolia Survey on Household Unincorporated Enterprises and Informal Sector (2007/8). Estimates produced by ESCAP Statistics Division.

34

Table 12. Unincorporated household enterprises by sector of activity and sex of the operator, Philippines 2009.

Enterprises % Enterprises % Enterprises %Mining and related activities 70,277 2.4% 8,828 0.3% 79,105 1.3%Manufacturing 213,183 7.2% 494,569 14.8% 707,751 11.2%Construction 296,745 10.1% 0 0.0% 296,745 4.7%Trade activities 930,160 31.5% 2,297,414 68.6% 3,227,574 51.2%Hotels and restaurants 44,892 1.5% 134,907 4.0% 179,798 2.9%Transportation & communication 1,163,739 39.4% 38,722 1.2% 1,202,462 19.1%Financial services 3,659 0.1% 16,165 0.5% 19,823 0.3%Real estate services 103,007 3.5% 16,863 0.5% 119,870 1.9%Educational services 5,923 0.2% 21,062 0.6% 26,984 0.4%Health and social work 25,308 0.9% 66,878 2.0% 92,186 1.5%Other personal services 94,562 3.2% 255,905 7.6% 350,467 5.6%Total 2,951,453 100.0% 3,351,312 100.0% 6,302,765 100.0%

Male operated Female operated Total

Source The Informal Sector Survey, ISS (2009), Phase II (Philippines). Estimates produced by ESCAP Statistics Division

35

Table 13. Unincorporated household enterprises by sector of activity and sex of the operator, Mongolia 2007/8.

Enterprises % Enterprises % Enterprises %Mining and manufacturing 16,973 19.0% 9,514 15.5% 26,488 17.6%Construction 6,503 7.3% 1,678 2.7% 8,181 5.4%Trade activities 24,624 27.5% 37,563 61.3% 62,188 41.3%Hotels and restaurants 2,026 2.3% 3,774 6.2% 5,799 3.8%Repair 4,237 4.7% 1,130 1.8% 5,367 3.6%Transportation & communication 30,424 34.0% 2,382 3.9% 32,806 21.8%Other services 2,488 2.8% 2,747 4.5% 5,235 3.5%Other activities 2,163 2.4% 2,458 4.0% 4,620 3.1%Total 89,438 100.0% 61,246 100.0% 150,684 100.0%

Male operated Female operated Total

Source: Mongolia Survey on Household Unincorporated Enterprises and Informal Sector (2007/8). Estimates produced by ESCAP Statistics Division.

36

Table 14. Unincorporated household enterprises by sector of activity and size, Philippines 2009.

Enterprises % Enterprises % Enterprises %Mining and related activities 79,105 1.3% --- --- --- ---Manufacturing 684,863 11.2% 17,547 14.9% 5,341 11.2%Construction 278,663 4.5% 4,649 3.9% 13,433 28.1%Trade activities 3,168,862 51.6% 47,042 39.9% 11,670 24.4%Hotels and restaurants 149,916 2.4% 21,025 17.8% 8,857 18.5%Transportation & communication 1,183,777 19.3% 17,282 14.6% 1,402 2.9%Financial services 19,823 0.3% --- --- --- ---Real estate & business services 113,022 1.8% 2,368 2.0% 4,480 9.4%Educational services 21,206 0.3% 5,779 4.9% --- ---Health and social work 92,186 1.5% --- --- --- ---Other personal services 345,568 5.6% 2,301 2.0% 2,597 5.4%Total 6,136,992 100.0% 117,993 100.0% 47,780 100.0%

0 to 2 3 to 5 more than 5


37

Table 15. Unincorporated household enterprises by sector of activity and size, Mongolia.

Enterprises % Enterprises % Enterprises %Mining and manufacturing 7,520 5.3% 129 6.9% --- ---Construction 22,026 15.5% 127 6.7% --- ---Trade activities 2,656 1.9% 0 0.0% --- ---Hotels and restaurants 3,108 2.2% 104 5.5% --- ---Repair 20,789 14.6% 0 0.0% --- ---Transportation & communication 1,893 1.3% 250 13.3% --- ---Other services 2,410 1.7% 0 0.0% --- ---Other activities/unclassified 81,821 57.5% 1,270 67.5% --- ---Total 142,224 100.0% 1,880 100.0% --- ---

0 to 2 3 to 5 more than 5

Source: Mongolia Survey on Household Unincorporated Enterprises and Informal Sector (2007/8). Estimates produced by ESCAP Statistics Division.

38

Table 16. Location of operation, unincorporated household enterprises, Mongolia, 2007/8

In street/non-permanent 4112.9 2.7%Vehicle/cart/wheelbarrow 21429.2 14.2%Client's home 4037.8 2.7%Own-home 10356.5 6.9%Own-home with special installation 16424.9 10.9%Market stall/shed/kiosk 5158.3 3.4%Mining site 3936.1 2.6%Garbage/refuse area 1092.9 0.7%Permanent premises for trade (shop, market, etc) 52969.5 35.1%Workshop, restaurant, hotel 1149.3 0.8%Taxi stand, transportation center/hub 7976.3 5.3%Other/unknown 22380.1 14.8%Total 151023.8 100.0% Source: Mongolia Survey on Household Unincorporated Enterprises and Informal Sector (2007/8). Estimates produced by ESCAP Statistics Division.

39

Table 17. Share of respondents reporting problem associated with operating unincorporated household enterprises in Mongolia, 2007/8.

Formal Informal

Access to/supply of raw materials 5.9% 10.1%Sale of product (lack of customers) 40.1% 36.6%Sale of product (competition) 52.1% 45.3%Financial difficulties/access to credit 26.5% 26.0%Lack of space 26.0% 26.7%Lack of equipment 21.4% 26.5%Management/organizational problems 12.9% 10.4%Regulatory barriers/taxes 14.5% 11.1% Source: Mongolia Survey on Household Unincorporated Enterprises and Informal Sector (2007/8). Estimates produced by ESCAP Statistics Division.

working paper no. 3 - defining and measuring informal ...€¦ · defining informal paid employees...

Documents