This document discusses informal and non-standard employment based on cross-national statistics and recent trends. It provides an overview of key concepts related to informal employment and the progress made in international statistics on this topic. Specifically, the ILO published the first ever globally harmonized estimates of informal employment in 2018, finding over 60% of total global employment is informal. The estimates provide insight into informal employment trends across regions, sex, employment status, industries, and more. Developing reliable cross-national measures of informal employment has involved collaboration between the ILO and other organizations over many years.

1. INFORMAL AND NON-STANDARD EMPLOYMENT: CROSS-NATIONAL
STATISTICS, RECENT TRENDS, AND SALIENT ISSUES
FRANÇOISE CARRÉ
WIEGO
21 AUGUST 2019
KHAZANAH RESEARCH INSTITUTE, KUALA LUMPUR, MALAYSIA

2. Purpose
 Background: Since 1970s, researchers in “global” North and global
South countries concerned about the differentiation of employment.
Distinct research literatures, different terminologies (NSFE, Informal
employment). Similar focus on discontinuities in labor market.
 Draw connections between international statistical definition of Informal
Employment and country measures of employment differentiation.
 Value of cross-national statistics on informal employment: Change in
structure of the labor market across countries and types of economies.
 Measuring informal employment (IE): Essential component of national
labor force statistics
 Significant areas of progress in international statistics regarding Informal
Employment: ILO harmonized global estimates

3. Informal Employment essential component of
national labor force statistics – Outline
 Why measure informal employment
 Relevance of IE for all types of economies and labor markets
 Concepts
 Progress in International Statistics - 1: First ever global harmonized IE estimates
 ILO 2018 global, harmonized, estimates: “Snapshot” – prior to details
 Details on the IE definition: Informal sector; Informal employment
 How the ILO 2018 publication implemented the IE definition cross-nationally
 Incidence of informal employment across: regions; sex; main status in employment;
status in employment and sex; broad industry sectors
 Historical process for getting to 2018 IE estimates
 Progress in International Statistics - 2: ICSE-18 relevance to IE measurement
(Employee sub-categories and Dependent Contractors  possible cross tabulation
with social protection coverage)

4. Why measure informal employment
 Shared concern about changes in labor markets, particularly in the
types of work arrangements facing workers.
 In countries where wage employment dominates: Changes in wage
employment; more differentiated. Some severed from social
protection. Also, growth of new forms of self-employment.
 In countries where self-employment/non-wage employment
dominates: co-existence of traditional forms of self-employment
(e.g. craft, vending, transport, farming) with newer forms of work
that get classified as self-employment but are less independent.
 Raise issues about 1) access to employment-related social
protection and 2) whether there are changes in employment under
way that share similarities across types of economies.

5. Why Informal Employment in cross-national
statistics
 Core concern: lack of access to employment-related social
protection (e.g. old-age pension), lack of coverage from labor
standards (employees only) due to the nature of the work
arrangement.
 What constitutes informal employment is different for wage
employees than for those categorized as self-employed.
 Research interest: For overarching view of structure of labor
markets across types of economies; Devolution of wage
employment?; New forms of dependency?
 Policy interest: Shifts in access to employment-related social
protection, whether wage or self-employed. Poverty risk.

6. Concepts
Three related official statistical terms and definitions, often used imprecisely and
interchangeably:
 informal sector refers to the production and employment that takes place in
unincorporated small or unregistered enterprises (1993 ICLS). Enterprise-
based definition.
 informal employment refers to employment not covered or insufficiently
covered by formal arrangements through their work, including:
 own account workers and employers in informal sector enterprises
 employees who do not enjoy labour rights: e.g. not receiving social insurance through
their job, or lacking the right to vacation or sick leave, whether or not they work in
informal or formal enterprises or households
 unpaid workers, including family workers, own use producers, volunteers and trainees
(2003 ICLS)
 informal economy refers to all units, activities, and workers so defined and the

7. Progress: ILO 2018 First Ever Harmonized
Statistics on the Informal Economy
 Database: over 100 countries now send micro-data files of
employment data to the ILO
 ILO applied a harmonized approach to preparing estimates of
informal employment and employment in the informal sector
 Informal employment may not have been a direct focus of the
national surveys in the ILO micro-data files but cross-
national estimates are feasible, thus contradicting the view
that informal employment is so different across countries that
it is not feasible to have world-wide estimates
 Estimates include developed, emerging and developing
countries and agricultural and non-agricultural employment

8. ILO 2018 First Ever Harmonized Statistics on the
Informal Economy - A snapshot
 More than 60% of total employment worldwide is informal
 Nearly 70% of employment in developing and emerging countries is informal
 90% in developing countries
 67% in emerging countries
 From 86% of employment in Africa to 30% in emerging economies of Eastern
Europe and Central Asia
 Self-employment represents 60% of informal employment globally and nearly 80%
of informal employment in low-income countries
 The share of self-employed in informal employment increases as national GDP
levels decrease; while the share of employees/wage workers in informal
employment increases as national GDP levels increase
Source: Prepared by Florence Bonnet (ILO) in 2018 based on ILO micro-data files for 118 countries, using harmonized
criteria to identify informal employment & with averages weighted by a country’s total employment.

9. ICLS 1993 Definition: Informal Sector
 Informal sector units – criteria for determining (defined by
absence of one or other of the following characteristics)
 Are not constituted as a separate, legal entity but owned by
persons/households  unincorporated
 Do not have complete accounts
 Are not registered at national level through
-- tax/social security
-- factories/commercial acts
-- professional groups
 It is an enterprise-based definition

10. ICLS 2003 Definition: Informal Employment
 Informal employment expands the scope of informality beyond the informal sector
enterprises
 Informal employment, so defined, includes:
- All contributing family workers, regardless of unit
- Employers and own-account workers in informal sector units or household units
- - Employees whose employment relationship is not subject in law or practice to:
• national labour legislation
• social protection
• income taxation
• entitlement to certain benefits (severance pay, paid or sick leave, advance
notice of dismissal)
 Historically, countries given flexibility in selecting criterion(a) for informal sector or
employment that are most meaningful given national institutional context.
Harmonization still possible.

11. Malaysia measure & ILO for 2 other
countries
Informal Sector Employment Informal Employment (Inside
and Outside Informal Sector)
% of Total Emp. % of Non-agr.
Emp.
% of Total
Emp.
% of Non-agr.
Emp. (SDG
8.3.1)
Malaysia 2017* 9.4 10.6 -- --
Republic of
Korea 2014**
26.1 23.3 31.5 28.8
Japan 2010** 14.3 12.0 18.7 16.3
*/ Malaysia Department of Statistics, Informal Sector Work Force Survey Report
2017
**/ ILO 2018, Women and Men in the Informal Economy: A Statistical Profile

12. SIGNIFICANCE OF INFORMAL EMPLOYMENT:
Informal employment as % of total employment by region (Excluding developed
countries)
Region
Sub-Saharan Africa (excluding Southern Africa) 92
Sub-Saharan Africa as a whole 89
South Asia 88
East and Southeast Asia (excluding China) 77
Middle East and North Africa 68
Latin America and the Caribbean 54
Eastern Europe and Central Asia 37

13. SIGNIFICANCE OF INFORMAL EMPLOYMENT:
Informal Employment as % of Total,
Women’s & Men’s Employment
Countries by income
level
Total Women Men
World 61 58 63
Developing countries 90 92 87
Bangladesh 89 94 87
India 88 90 88
Indonesia 86 87 85
Vietnam 76 75 77
Emerging countries 67 64 69
Developed countries 18 18 19
Germany 10 10 10
Source: ILO 2018

14. COMPOSITION OF INFORMAL EMPLOYMENT:
BY WAGE EMPLOYMENT & SELF-EMPLOYMENT (%)
Countries by income level Wage
employment
Self-employment
World 36 64
Developing 21 79
Bangladesh 42 58
India 14 86
Indonesia 38 62
Vietnam 28 72
Emerging 37 63
Developed 51 49
Germany 63 37
Source: ILO 2018

15. COMPOSITION OF INFORMAL EMPLOYMENT:
BY STATUS IN EMPLOYMENT & SEX
Countries by income
level
Employers Employees /
Wage Workers
Own Account
Workers
Contributing
Family Workers
Total Women Men Total Women Men Total Women Men Total Women Men
World 3 1 3 36 34 37 45 36 50 16 28 9
Developing 2 1 3 21 17 25 54 51 57 22 31 14
Bangladesh 0.7 0.1 1 42 38 44 36 12 50 21 50 5
India 1.2 0.5 1.4 14 11 15 70 57 75 15 31 10
Indonesia 2.6 1 3.5 38 34 40 42 29 50 18 36 6
Vietnam 1.8 1.2 2.4 28 19 36 49 49 48 22 30 14
Emerging 3 1 3 37 36 38 44 34 50 16 29 8
Developed 6 4 8 51 57 47 36 28 42 6 10 3
Germany 8.8 6.6 10.4 63 68 59 25 21 29 4 5 2
Source: ILO 2018

16. COMPOSITION OF INFORMAL EMPLOYMENT:
% of Informal Employment in
Agriculture, Services & Manufacturing
Countries by income level Agriculture Services Manufacturing
World 38 44 18
Developing 69 21 10
Bangladesh 50 30 20
India 49 25 26
Indonesia 39 39 22
Vietnam 58 25 17
Emerging 36 46 19
Developed 10 71 19
Germany 2.5 77 21
Source: ILO 2018

17. Years in the making: Progress through ILO – WIEGO
collaboration to develop and disseminate statistics on Informal
Employment
 WIEGO’s partnership with the ILO to develop statistics on the informal economy since its
founding in 1997
 Nature of collaboration: ILO has responsibility in international statistical system for these
data; WIEGO represents a group of informed users of employment statistics interested in
having official statistics represent informal workers
 Examples of this collaboration in the compilation and dissemination of statistics:
 WIEGO assisted in the development of earlier versions of the ILO data base on informal
employment and prepared two joint publications, Women and Men in the Informal Economy: A
Statistical Picture , the first edition in 2002 and the 2nd in 2013
 WIEGO advised on the 3rd edition of Women and Men in the Informal Economy: A Statistical
Picture which published the harmonized estimates
 WIEGO then published the data in more user-accessible formats in Women and Men in the
Informal Economy: A Statistical Brief (2019) and in a pamphlet, Counting the World’s Informal
Workers: A Global Snapshot
 WIEGO will collaborate with ILO on further publications using the database on informal
employment in developed countries and on categories of informal workers (e.g. domestic
workers, home-based workers, street vendors, market traders and waste-pickers).

18. Progress through ILO-WIEGO collaboration
on Informal Employment statistics –
methods
 Membership in the Expert Group on Statistics on the Informal Economy (the Delhi Group)
since its formation in 1997 along with countries to discuss technical issues involved with
informal sector and informal employment. The group reports to the UN Statistical
Commission.
 With ILO and the Delhi Group prepared Measuring Informality: A Statistical Manual on the
Informal Sector and Informal Employment (2013)
 Launched efforts to apply the concept of informal employment to developed countries with a
research conference at Harvard University in 2008 and continue through membership in
UNECE Expert Group on Measurement of Quality of Employment (which adopted Informal
Employment as experimental indicator as relevant to developed countries).
 Development and adoption of SDG Indicator 8.3.1 – “identification of the share of informal
employment in non-agricultural employment by sex” as an indicator for SDG #8 - Promote
sustained, inclusive and sustainable economic growth, full productive employment and
decent work

19. Progress in International Statistics with
relevance to measuring IE – ICSE-18
 ICSE 18-A: Within Dependent Employment: 3 categories
a. Employees: within it, sub-categories for short-term workers 
helpful for determining informal employment in countries with
preponderance of employees
b. Dependent contractors: New category
c. Contributing family workers
 Discuss a. and b.
 Can be explored for partial overlap with Informal Employment

20. 4 Employee sub-categories
 Permanent employees
 Fixed-term employees
 Short-term and casual employees
 Paid apprentices, trainees and interns
 2 of the primary categories of non-standard forms of
employment now recommended to be reported
 Combined with variables on social protection  Determine
what share of workers in non-standard wage employment also
are informal

21. Two NSFEs – With partial overlap with informal
employment
Fixed-term employees include:
 (a) employees with fixed-term contracts of employment with a duration of
three months or more;
 (b) employees without formal arrangements or contracts when it is
understood that the employment will have a duration of at least three
months but not of an indefinite nature.
Short-term and casual employees include:
 (a) short-term employees are those who are guaranteed a minimum
number of hours of work and are employed on a time-limited basis with
an expected duration of less than three months.
 (b) casual and intermittent employees are those who have no guarantee
of employment for a certain number of hours during a specified period but
may have arrangements of an ongoing or recurring nature.

22. Multi-party work relationships: Also useful
 Include:
(a) Agency workers
(b) Employees providing outsourced services.

23. Dependent contractors: Help classify “free-
lancers”, platform mediated workers,
homeworkers
- Workers who have contractual arrangements of a commercial nature to provide goods or services
for or through another economic unit.
- Not employees of that economic unit, but are dependent on that unit for organization and execution of
the work, income, or for access to the market.
- Workers employed for profit, who are dependent on another entity that exercises control over their
productive activities and directly benefits from the work performed by them.
(a) Their dependency may be of an operational nature, through organization of the work and/or of an
economic nature such as through control over access to the market, the price for the goods produced or
services provided, or access to raw materials or capital items.
(b) The economic units on which they depend may be market or non-market units and include
corporations, governments and non-profit institutions which benefit from a share in the proceeds of sales
of goods or services produced by the dependent contractor, and/or benefit when the work performed by
dependent contractors may otherwise be performed by its employees.
(c) The activity of the dependent contractor would potentially be at risk in the event of termination of
the contractual relationship with that economic unit.
- Paid by way of a commercial transaction.
- Often treated as self-employed under national laws.

24. Thank you
www.wiego.org
Francoise.Carre@wiego.org
Francoise.Carre@umb.edu

25. How ILO implemented IE measurement- Informal sector
(for reference only)
 Rule out government, corporations, and other incorporated organizations
IF enterprise is:
 Unincorporated unit
 AND does not keep accounts for reporting to government (bookkeeping) 
Informal sector unit
 OR (if DK, NA, or not asked) enterprise not registered (national level) with tax/social
security or factory acts, or professional association  Informal sector
 if DK, NA, or not asked, USE alternate criteria:
 Workers with status in employment = Employee and unit does NOT contribute toward
social security or tax on wage  Informal sector unit
 OR if not Employee Place of work is considered
  if non- fixed work premises:  informal sector unit
  if other type of work premises and Size 5 or under  informal sector unit

26. How ILO implemented IE measurement-
Informal Employment (for reference only)
 All Contributing Family workers  Informal employment –
regardless of unit
 Employers, Own-account workers, Members of cooperatives =
Informal workers if unit is informal
 If answer Employee, or DK/others  decision tree based on Social
security or benefits coverage
 If DO NOT receive employment related social security (e.g. pension)
 informal employment
 OR (if DK, NA) if do NOT receive paid annual leave  IE
 OR (if DK, NA) if do NOT receive paid sick leave (de facto) or DK/NA 
IE
 Put another way, to be formal, an employee must receive Social
Security OR both paid annual leave and paid sick leave.