1. Statistics on the informal employment & employment in the informal sector: From questions to derived variables
Tite Habiyakare, Senior Statistician,
ILO Regional Office for Asia and the Pacific
Regional Course on Informality:
Definitions, Measurement, SDGs and Other Policy Indicators
Chiba (Japan), October 2017

2. Contents Objectives Key derived variables Key questions and flowcharts
Variables specifications
Group activity: identify key questions and specifications
ILO Department of Statistics

3. 1. Objectives of the Session
From the conceptual framework of informal economy to an operational statistical definition of the derived variables;
Identify in the survey questionnaire, questions that are needed to reproduce the derived variables;
Using the questions and appropriate categories of these questions, prepare the specifications to obtain the derived variables.
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4. 2. Key derived variables
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5. Starting point: derived variables
Informal employment
Formal employment
Total
Total employment A B C
Informal sector D E F
Formal sector G H I
Households J K L
Employment in agriculture M N O

6. Variables to create (1)
Employment: inside a variable such as Labour force status classification (employed, unemployed, outside the labour force)- ilo_lfs;
Informal and formal sector: variable called Aggregated institutional sector, using the main job (formal sector, informal sector, household)- ilo_job1_ins_sector;
Informal and formal employment: variable Nature of the job (formal, informal)- ilo_job1_ife.
ILO Department of Statistics

7. Variables to create (2)
Other intermediary variables that may be needed for the calculation of key derived variables:
Status in employment: variable Aggregated status in employment, with main categories (employees or wage workers, employers, own-account workers, and contributing family helpers);
Etc.
ILO Department of Statistics

8. 3. Key questions and flowcharts
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9. Key questions: employment
Worked for pay of profit (at work);
Run a business for profit (at work)- with checks for sale if the business is in agriculture;
Helped unpaid a family member in a work for pay or profit;
Temporary absence from work for pay/profit & raisons for absence, and checks for return (or continued attachment to the work).
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10. E U Employment (LFS classification) flow chart (1)
Worked for pay / profit
for 1+ hours
NOT EMPLOYED
(without work for pay/ profit) N Y
With job, not at work N
Seeking work for pay/profit Y Y N
Reason of absence
Active method
Want work
Duration Y N
≤3 mo.
>3 mo.
Duration
Reason not seeking
Pay N
Available
Available Y N Y N Y
Reason / Situation E U
Potential LF
Willing
Others
Labour force
Outside labour force
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11. Employment flow chart (2)
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12. Key questions: informal economy
Informal sector employment (ISE)
Informal jobs
Institutional sector
Legal organization /
type of ownership
Registration of enterprise
Type of accounts kept
Taxation
Size
Industry (if excluding agriculture)
Type of place of work
Status in employment
Job-related benefits (employees)
Contribution by employer to pension funds / retirement schemes
Paid annual leave
Paid sick leave
Medical or health coverage, or other job-based benefits as per national context
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13. Aggregated institutional sector flowchart
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14. Informal employment flowchart
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15. 4. Derived variables specifications
(Example from Brunei LFS 2014 questionnaire)
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16. Aggregated status in employment
Original question(s) in the questionnaire: D05
Variable: ilo_job1_ste_icse93
Label: Status in employment (ICSE93)
Categories, labels, and specifications (recode):
1= Employees (wage workers): D05= 1, 2, or 6
2= Employers: D05= 3
3= Own account workers: D05= 4
4= Contributing family helpers: D05= 5
ILO Department of Statistics

17. Aggregated institutional sector (1)
Original question(s) in the questionnaire:
Institutional sector (D15);
Type of ownership (D16);
Registration (D17); and
Bookkeeping (written books of accounts, D18);
Location/ place of work (D13).
Variable: ilo_job1_ins_sector
Label: Aggregated institutional sector
Categories: 1= Formal sector
2= Informal sector
3= Households (private households).
ILO Department of Statistics

18. Aggregated institutional sector (2)
Variable specifications:
Formal sector: ilo_job1_ins_sector = 1
D15= 1, 2, or 4; OR D16= 1; OR D17= 1; OR D18= 1.
Informal sector: ilo_job1_ins_sector = 2
(D13= 3; OR D15= 3 or 4) AND
(D16= 2 or 3; AND D17= 2, 3, or 4; AND D18= 2 or 3)
(To include missing values: can use the negative statements).
Households: ilo_job1_ins_sector = 3
D13= 2.
ILO Department of Statistics

19. Nature of job- informal employment (1)
Original question(s) in the questionnaire:
Employer’s contribution to social security (D10);
Paid annual leave/ compensation (D11); and
Paid sick leave (D12).
Intermediary derived variables:
Aggregated status in employment (ilo_job1_ste_icse93);
Aggregated institutional sector (ilo_job1_ins_sector).
Variable: ilo_job1_ife
Label: Formal or informal nature of employment
Categories: 1= Formal employment
2= Informal employment.
ILO Department of Statistics

20. Nature of job- informal employment (2)
Variable specifications:
Formal employment: ilo_job1_ife = 1
(ilo_job1_ste_icse93= 1, AND
D10= 1, AND D11= 1, AND D12= 1); OR
ilo_job1_ins_sector= 1, AND ilo_job1_ste_icse93= 2 or 3.
Informal employment: ilo_job1_ife = 2
(D10= 2 or 3, OR D11= 2 or 3, OR D12= 2 or 3)); OR
(ilo_job1_ste_icse93= 2 or 3, AND
ilo_job1_ins_sector= 2 or 3); OR
ilo_job1_ste_icse93= 4.
ILO Department of Statistics

21. 5. Group activity Organize participants into 3 groups of countries;
Identify countries that have a recent stand-alone LFS questionnaire, and select one questionnaire to work with (or more than 1 if needed);
Identify questions that are needed to reproduce the derived variables for the informal economy;
Propose the specifications you would use to obtain the derived variables for the informal economy.
ILO Department of Statistics

22. References
JPKE (2014), Labour Force Survey 2014 Report, Bandar Seri Begawan, October 2015;
ILO (2013), Measuring informality: A statistical manual on the informal sector and informal employment, Geneva, October 2013;
ILO (1993), Resolution concerning statistics of employment in the informal sector, Geneva, January 1993;
ILO (2003), Guidelines concerning a statistical definition of informal employment, Geneva, November 2003.
ILO Department of Statistics