1. Development Account Project on the IS: implementation of the ‘1-2 Survey’ in the ESCWA region Giovanni Savio, Statistics Division, UN-ESCWA Expert Group Meeting on National Accounts Cairo, 12 – 14 May 2009

2. Scheme of presentation 1.General overview 2.Project on “Interregional Cooperation on the Measurement of Informal Sector and Informal Employment ” 3.Activities carried out in Pilot Countries 4.Outcomes, lessons learned and future steps

3. UN Regional Commissions

4.  Budget of RCs from the following sources 1.Regular Budget 2.Regular Program for Technical Cooperation 3.Extra Budget (i.e. DA Projects)  DA projects aim at capacity-building through sub-regional, regional and inter-regional Technical Cooperation for developing countries  Implemented as individual projects aimed at achieving distinct development impacts Budgetary Issues

5.  Overall Budget: $ 800,000  Duration: 4 years, 2006 - 2009  Implementing agencies: ECLAC, ESCAP (leading agency), ESCWA  ESCWA budget: $ 179,000  Steering Committee: UNSD, Regional Commissions, ILO and Delhi Group Project Facts

6. Project Countries ESCAP ESCWA ECLAC

7.  Informal sector (employment & contribution to GDP) mostly not covered in official statistics  Consequence: lack of exhaustivity  Data collection typically based on ad hoc studies (i.e. not part of regular collection system) and with limited scope/coverage  Data collected not internationally comparable  Consequence: lack of coherency over time and across areas  Finally, poor analysis and dissemination Reasons for DA Project

8. REGION Contributions of informal sector as % of non-agricultural … EmploymentGDP Northern Africa4827 Sub-Saharan Africa7241 Latin America5129 Asia6531 Source: ILO (2002), Women and Men in the Informal Sector: A Statistical Picture Reasons for DA Project

9. Informal Sector (Production) Significant underestimation of GDP Significant underestimation of GDP Lack of info on characteristics of informal sector enterprises, use of technology, access to credit, training, markets, etc. Lack of info on characteristics of informal sector enterprises, use of technology, access to credit, training, markets, etc. Lack of info on input-output relations between formal and informal sector enterprises Lack of info on input-output relations between formal and informal sector enterprises Informal Sector (Employment) Implausibly low labor participation rates, especially for women Implausibly low labor participation rates, especially for women Lack of info on differentials in earnings and working conditions between formal/informal employment (poverty) Lack of info on differentials in earnings and working conditions between formal/informal employment (poverty) Lack of info on different social protection arrangements covering formal/informal employment Lack of info on different social protection arrangements covering formal/informal employment Weaken the formulation, implementation and evaluation of policies and programmes aimed at promoting gender equality, eliminating child labour, generating decent work for all and reducing poverty

10. Overall Goal Improve the availability of informal sector and informal employment data 1. Raise awareness among stakeholders (NSOs, the Governments etc.) of developing countries on importance of collecting and disseminating data on informal sector 2. Improve technical capacity of NSOs to collect, compile, analyze and disseminate data on informal economy in line with international methods and standards A. Advocacy B. Capacity building C. Data collection D. Data analysis & Dissemination E. Knowledge management Objectives and Instruments

11.  Partnership approach (RCs and other entities), and …  … integration as far as concerns:  Scope, coverage, definitions etc.  Activities carried out  However, adaptation of activities to the level of development of the NSSs  Coordination with national and global statistics initiatives  Consistency with international standards (e.g. 2008 SNA, Delhi Group, ILO etc.) Strategy of the Project

12.  Raise awareness in stakeholders (concern on funding and sustainability of the approach for the future)  Data on informal employment and informal sector GDP  Country reports on:  “1-2 Survey” methodology and its implementation  “1-2 Survey” data analysis  Dissemination Expected Outcomes

13. Sketch of Approach 1. Household Sector 2. Unincorporated enterprises owned by households 3.a Own-account enterprises 3.b Enterprises of employers 4. Informal sector enterprises 1. Size 2. Registration 3. Others Unifying definition of the IS (XV ICLS Res.)

14. Sketch of Approach Informal own-account enterprises Other enterprises of employers Other own-account enterprises Enterprises of informal employers Own-account enterprises Enterprises of employers Informal sector Criteria: size, registration, others (1) (2) Unifying definition of the IS (XV ICLS Res.)

15.  Concretely, how to go from step 3 to 4?  Problems undermining comparability and coherence of IS estimates, for example:  Registration requirements change over time, across countries and often registration is made with more entities  In some countries all units should be registered with tax authorities  Registration criterion reduces response rate and quality  Registration of enterprise vs employees  Cut-off size of employees may change over time, across countries (i.e. different levels of technology), may refer to empl. on continuous basis or total empl. or empl. observed in the reference period, and may depend on legislation and statistical considerations Sketch of Approach

16.  Main dilemma: trade-off between flexibility and comparability  The flexibility in delineating the IS according to ICLS Resolution hampers comparability of outcomes across countries and over time. However, flexibility in the adaptation of the criteria is an important characteristic  Main features of the Unified Data Collection Strategy for the Informal Sector (UDCS-IS)  Expanded scope of data collection, and flexibility ex- post non ex-ante (comparative analysis on criteria)  Coherency with international recommendations  Comprehensiveness (all areas, activities etc.) Sketch of Approach

17. Household Enterprises Producing at least some goods & services for market Producing goods & services only for own final use Non-agricultural Agricultural GoodsServices Formal sector Informal sector Formal sector Informal sector Agriculture, forestry, fishing Paid domestic services Other activitiesOwner occupied dwelling services HUEMs, starting point for Phase 2 data collection. Blue area, after (3) screening criteria applied in the LFS

18.  HUEM1: Legal organization  Production units that are not constituted as separate legal entities independently of their owners  HUEM2: Book-keeping or accounting practice  Production units that do not keep a complete set of accounts  HUEM3: Product destination  At least some of the products are sold/bartered in the market Sketch of Approach

19.  Data colleted through variant of mixed household-enterprise survey called ‘1-2 Survey’  First phase: Household Survey, on which the sampling frame for the second phase is made  Possibly build upon existing surveys with small changes, preferably LFS (extended)  Second phase: Enterprise Survey  Designed as a household-enterprise independent module based on outcomes of the extended LFS Sketch of Approach

21.  Participation in the ESCAP Workshop on Informal Employment and Informal Sector Data Collection: Strategy, Tools and Advocacy, Bangkok, September 2007  ESCWA Workshop on Informal Employment and Informal Sector Data Collection: Strategy, Tools and Advocacy for PCBS staff, with participation of Jordan DoS, Amman, April 2008  Signature of ESCWA-PCBS LoA to participate in the DA Project as Pilot Country, June 2008 Activities Completed

22.  August 2008: Pilot “1-2 Survey” carried out by PCBS in West Bank  September 2008: ESCWA Advisory mission to study results of the Pilot Survey  September 2008: Preparation for the Survey (training)  October 2008 - March 2009: Conduct of the “1-2 Survey” in West Bank and Gaza Strip Activities Completed

23.  Quarterly LFS carried out by PCBS since 1995  Last survey samples based on 1997 Census updated in 2003  About 7,500 households interviewed each quarter, questionnaires completed about 6,000 each quarter  “1-2 Survey”: Carried out during Q4, 4 October – 31 December 2008 on  11,338 households (7,644 in West Bank, 3,694 in Gaza Strip) PCBS LFS and ‘1-2 Survey’

24.  Due to war, only 70% of Gaza sample was interviewed (2,553 over 3,694)  Phase 2, before war: 735 HUEMs found in West Bank, 163 in Gaza Strip interviewed  Second Round, after war: Completed collection for Gaza Strip, extended the sample in the same region to Q1 2009  Final results expected by mid-April 2009  Second advisory mission of ESCWA to PCBS: end of April 2009 to analyze results PCBS LFS and ‘1-2 Survey’

25. Activities Planned ESCWA Timeline of Activities (Revised January 2009) QuarterYearResponsible Advocacy/Dissemination Workshops 1Customize workshop design and produce materialsQ32009 ESCWA - PCBS 2Conduct of advocacy/dissemination workshop in countryQ42009 3Preparation and submission of reports on workshopQ42009 Data Collection 1Data collection in PalestineQ4 2008 - Q1 2009PCBS 2Prepare and submit final reports on data collectionQ22009 PCBS Data Editing, Analysis and Dissemination 1Data checking and editing, preparation of dataset for analysisQ12009 ESCWA - PCBS 2Preparation of tablesQ22009 3 Generation of estimates of informal employment and employment in the IS and national accounts and related country reportsQ32009 4Country report on analysis of 1-2 Survey data for disseminationQ32009 5Development of country databaseQ32009 Training Workshops I. Workshops for project country All RCs and PCBS 1Interregional Workshop for Sharing Results and Project EvaluationQ32009 II. Workshops for project country and other countries in the region ESCWA, PCBS and other 1 Regional Workshop on the Measurement of the Informal Sector and Informal EmploymentQ22009 Knowledge Management 1Prepare country reportQ42009ESCWA - PCBS

26.  Consistency with international recommendations  Great flexibility and adaptability  Ex-post analysis and identification of IS  Expanded scope  Easy applicability, reduced costs for collecting information  Information gathered possibly for use in various socio-economic studies and analyses  Reliability of final results  Ambition: extend application to other countries in the region Lessons learned (so far)