informal sector n.
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INFORMAL SECTOR

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INFORMAL SECTOR

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  1. INFORMAL SECTOR FORMAL SECTOR INFORMAL EMPLOYMENT HOUSEHOLD UNITS

  2. Source: UN Women. 2015. Progress of the World’s Women 2015-2016. New York, USA.

  3. Source: UN Women. 2015. Progress of the World’s Women 2015-2016. New York, USA.

  4. INFORMAL EMPLOYMENT Employment in the INFORMAL SECTOR Employed in the FORMAL SECTOR Total number of INFORMAL JOBS Employed in HOUSEHOLDS

  5. Definition of Informal Employment: Principles • Principle 1: Informal employment is a characteristic of the job • Principle 2: An informal job is defined on the basis of a combination of three criteria: • Status in employment • Type of production unit in which the job is carried out and • Employment relationship

  6. (P1) Characteristic of the Job

  7. Conceptual Framework Source: 17th ICLS

  8. Contributing family workers and employees are defined on the basis of the characteristics of the job If the production unit is an informal sector unit then the job is defined as informal Employees can have informal or formal jobs in all types of production units Own-account workers, employers and MPC are defined on the basis of the characteristics of the production unit Contributing family workers have per definition an informal job Own use production of goods exclusively for own final use is per definition an informal job Source: 17th ICLS

  9. Informal Jobs … • Employers, • Own account workers, • and MPC Contributing family workers Employees ALL ? • Economic • unit is informal • or a household Source: ICLS 19

  10. (P2) Employment Relationship

  11. Informal employees are NOT SUBJECT to … • National labour legislation • Not to be confused with having ‘written contract’ • Income taxation • It depends … • Social protection • If contributions are deducted, then formal • But, it depends … • Certain employment benefits • Actually enjoy vs theoretically

  12. Other possible criteria* • Written contract • Only if it implies labour legislation coverage. But beware that may not be relevant if employees may not actually enjoy benefits/protection by labour legislation • May not be relevant if even government employees do not have a written contract • Casual/temporary nature of job • Useful when labour legislation does not cover employees in these situations • But beware that there may be employees in permanent jobs that may also be informal • Low working hours or low wages • Useful when workers in these situations are not expected to contribute to social security systems, to pay taxes or to enjoy any work benefits * These criteria cannot be used to define the informal employment but may be used when information on main criteria is not available

  13. Employment in the Informal Economy Employment in the informal sector: A + B Informal employment: A + C Employment in the informal economy: A + B + C The identification of the informal sector is crucial in all concepts

  14. QUIZZZ: True or False? • Workers with informal job can only work in the informal sector • Domestic employees can only have informal jobs • Contributing family workers will have a formal job if they have right to vacations • Contributing family workers in the formal sector have formal jobs • Informal sector entrepreneurs always have informal jobs