1. The Informal Sector Has a Future McGill - IHSP November 15-16, 2007 1 Global Strategies: Improving the Labour Conditions of the Working Poor. Panel 3: Vulnerable Workers McGill - IHSP Paul-Martel Roy UQAM

2. The Informal Sector Has a Future McGill - IHSP November 15-16, 2007 2 1. Introduction 2. Concepts and definition 3. The evolution of various segments of the economy 4. The evolution of the informal sector 5. Conclusion: the informal sector has a future

3. The Informal Sector Has a Future – 1 McGill - IHSP November 15-16, 2007 3 The term “informal economy” is commonly used but it is not easy to define and pinpoint The expression itself was coined in the ILO’s Kenyan mission report in 1971 The notion of informality has greatly evolved since; the main criterion of the definition, for the labour market, going from business size to non-registration and then to lack of separate accounting The merit of each criterion must be assessed. The non- registration criterion is the most commonly used

4. The Informal Sector Has a Future – 2.1 McGill - IHSP November 15-16, 2007 4 Speaking of informal economy, is speaking about economic segmentation The idea of segmentation has also greatly evolved during the last few decades, whether it is applied to countries in the north or to those in the south

5. The Informal Sector Has a Future – 2.2 McGill - IHSP November 15-16, 2007 5 The north is divided into a primary sector and a secondary sector, (Piore) and subdivided into an upper primary sector and a lower primary sector (Piore again)

6. The Informal Sector Has a Future – 2.3 McGill - IHSP November 15-16, 2007 6 Several more distinctions were made in the south: the agricultural and industrial sectors; (Lewis, Todaro) and of course the formal and informal sectors The formal sector is subdivided into the public and private sectors There also exist a traditional category and an externally focused category (Perez Sainz) The informal sector is subdivided into accessible and less accessible sectors (Fields)

7. The Informal Sector Has a Future – 2.4 McGill - IHSP November 15-16, 2007 7 The relevance of all these concepts is to be assessed As for us, we have led some studies in the Caribbean Belonging to a particular sector does not seem to be, on a self-sustaining basis, a major factor in revenue determination

8. The Informal Sector Has a Future – 3 McGill - IHSP November 15-16, 2007 8 That being the case, how are the various segments of the economy expected to evolve, like the informal economy ? In order to answer this question, the following items must be examined, for different economies: - their demographic development, - their urbanization trend, - the general trends, characteristic of all free market economies This can of course lead to very different predictions depending on the economy in question

9. The Informal Sector Has a Future – 4.1 McGill - IHSP November 15-16, 2007 9 The informal economy will evolve as well This change is expected in three directions: a step toward formalization, which involves - tax credits - easing of employment contracts - social benefit plans - market access - relaxation of administrative constraints

10. The Informal Sector Has a Future – 4.2 McGill - IHSP November 15-16, 2007 10 a step toward solidarity which will benefit from - better access to financing - increased movement toward social economics

11. The Informal Sector Has a Future – 4.3 McGill - IHSP November 15-16, 2007 11 lastly and perhaps most importantly, a step like before that is to say an explosion of activities, which correspond to what is now called the informal economy

12. The Informal Sector Has a Future – 5.1 McGill - IHSP November 15-16, 2007 12 Which one of these trends will be definitive ? It’s hard to predict The informal economy is at least guaranteed a future, - in the sense that it’s evolving toward a structure that will bring a higher level of well-being to its participants

13. The Informal Sector Has a Future – 5.2 McGill - IHSP November 15-16, 2007 13 - or in the sense of maintaining more or less its current characteristics The informal sector would then continue to be a major component if not the main component of several developing countries. Even more reason to continue to work hard to better understand its dynamics, in order to plan better targeted interventions. It’s exactly what we are doing here !