1. The informal economy in national accounts statistics
Regional Course on Informality: Definitions. Measurement, SDGs and Other Policy Indicators
16 – 20 October 2017
Chiba, Japan
The informal economy in national accounts statistics
Alick Nyasulu
Lecturer/SIAP

2. Learning objectives Informal economy into GDP
Underlying concept of informal economy
The GDP-production boundary and the informal economy
Estimating GDP components of the informal economy

3. Informal Economy Producing Units Household Enterprises
Employment/Income Generation
Low level organization/No distinction between labour & capital
Household Enterprises
Assets belong to owners
No contracts
Owners personally liable for finance risk
Production & household expenditure indistinguishable

4. Informal sector and Un-observed Economy
Not observed, informal
Observed, informal A
B C
Not Observed and informal

5. Estimating GDP GDP Boundary Informal Market Own-use Illegal/legal
Gross Domestic Product (GDP) is value of goods and services produced in an economic territory
GDP Boundary
Informal
Market
Own-use
Illegal/legal
Non-observed
Potentially all goods/services that can be sold or be supplied to another unit

6. Estimating GDP The Production Approach Value of Production
Cost of inputs
Minus
=∑Gross Value Added
Sum of Gross Value Added of all activities is GDP

7. Estimating GDP For all informal activities The Production Approach
Labour Costs
Capital Goods
Loans
Excludes
Value of Production
Cost of inputs
Includes
For sale
Operating costs
Raw materials
Utility costs
Other expenses other than labour and capital
For own use

8. Some administrative data
Estimating GDP
Estimation Process-Concept & Data Sources
Identifying informal activities
Potential Data Sources
Mixed Surveys
Population Census
Some administrative data
For all informal activities

9. Estimating GDP For all informal activities
Estimation Process-Valuation of Transactions
Market Production
Valuation
Non-Market Production
Own Use
Market Prices
Basic Prices
Prices
For all informal activities
Transactions

10. Estimating GDP Indicators Output Indicators Input Indicators
When there is no data: What should you do?
Indicators
Output Indicators
Informal Employment/Expert opinions/Growth in neighbouring economies
Formal employment/Population growth/Business registrations
Input Indicators
Employment/Minimum wage growth rates