The informal sector in the 1993 sna rev 1
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THE INFORMAL SECTOR in the 1993 SNA, Rev.1. A EG IVO HAVINGA, UN Statistics Division CAROL CARSON, Project Manager Session on the Non-observed Economy Joint National Accounts Meeting April 25-28, 2006 Geneva . 1. Plan of the presentation. Informal sector in the SNA Update process

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THE INFORMAL SECTOR in the 1993 SNA, Rev.1

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IVO HAVINGA, UN Statistics Division

CAROL CARSON, Project Manager

Session on the Non-observed Economy

Joint National Accounts Meeting

April 25-28, 2006 Geneva


Plan of the presentation

  • Informal sector in the SNA Update process

  • Context: Why is the informal sector an important issue for the update of the 1993 SNA?

  • Definition of the informal sector: differences between the ICLS (ILO) concepts of employment in the informal sector/informal employment and the SNA framework

  • Draft annotated outline of a chapter on the informal sector in the 1993 SNA, Rev.1

  • Looking ahead

Thus far in the update process

  • Building on earlier discussions, the January-February AEG agreed that…

    • differences in terminology should be reconciled,

    • differences in the definitions of market and non-market should be considered,

    • questions of comparability should be explored,

    • the new SNA chapter should provide a good introduction without attempting include all the material of a handbook.

  • The Statistical Commission, last month, welcomed the chapter on the informal sector

  • Context: Policy relevance of measurement of the informal sector

    • Links to development objectives on…

      • income generation,

      • employment creation and

      • poverty reduction

        and to the design and monitoring of targeted support programs

    • Informal sector’s contribution to non-agricultural GDP

      • 27 percent in northern Africa

      • 41 percent in Sub-Saharan Africa

      • 29 percent in Latin America

      • 31 percent in Asia

    Context: Selected developments in methods and practicesince 1993

    • Papers of Delhi Group on Informal Sector Statistics

    • UN handbook Household Accounting: Experience in Concepts and Compilation, Volume 1: Household Sector Accounts

    • Measuring the Non-observed Economy: A Handbook by OECD, IMF, ILO and CISSTAT

    • UNECE manual Non-observed Economy in National Accounts

    Context: Calls for guidelines

    • Issue in the work on the 1993 SNA; placed on the research agenda

    • Statistical Commission 2004 reiterated collaboration between UNSD and the Delhi Group on informal sector

    • Forthcoming publication Surveys of Informal Sector and Informal Employment

      • Collaborative effort of ILO and members of Delhi Group

      • Chapter on uses of informal sector data for national accounts purposes

    Definition of the informal sector

    • Differences between ICLS and SNA…

      • in terminology

      • in segmenting the economy

      • in the use of enterprise-based criteria

      • in the universe of household enterprises

        would be key points for discussion in the new chapter. What are these differences?


    • The ICLS use of “sector” does not match the definition in the SNA.

    • The word “informal” has several meanings:

      • May imply a formal-informal sector distinction between household enterprises.

      • Can refer to exhaustiveness of data collection practices as well as a production unit with specific characteristics.

    Terminology (2)

    • The ICLS use of “households” is narrower than the meaning in the national accounts framework.

    • National accountants consider the “formal” segment of enterprises to be confined to institutional sectors other than the household sector.

    Segmenting the economy

    • ICLS uses non-registration to identify informal enterprises within household enterprises; in many countries this may coincide with lack of legal status and of accounts.

    • ICLS refers only to production units that engage labor as input; national accounts refer also to those that do not use labor inputs.

    Use of enterprise-based criteria

    • Criterion for market production

      • SNA: market producers are those that sell “most or all” of their production on the market at economically significant prices.

      • ICLS: uses the phrase “some or all”.

    • Conceptual and practical advantage of “some or all”criterion.

    Use of enterprise-based criteria (2)

    • Possible grouping for macroeconomic statistics on the informal sector:

      Household enterprises with employment

      Enterprises with market production

      Informal sector enterprises

      Other household enterprises

      Enterprises with only production for own final use

      Household enterprises without employment

    Universes of household enterprises

    • With and without labor input (SNA) versus with labor inputs (ICLS) (noted above)

    • All economic activities (SNA) versus non-agricultural activities (ICLS)

    Points for discussion

    • What are views …

      • about the differences listed—for example, which are most important in practice?

      • about the ICLS “some or all” criterion used in identifying market producers? Does it have potential as an application for analysis and policy?

      • about international comparability—should further attempts be made to identify groupings, including the informal sector, that have greater cross-border and cross-region comparability?

    Draft outline of chapter

    • Introduction

    • The informal sector: a broad statistical perspective

    • Definition of the informal sector

    • Other concepts

    • Measurement

    Points for discussion

    • Are there relevant topics that are missing from the outline?

    • Are there views about the balance to be struck—that the chapter should be an introduction, not a handbook? What could be omitted from the outline?

    Looking ahead

    • AEG sub-group

    • Collaboration with ILO and Delhi Group

    • Forums to test plans and drafts (e.g., UNECE April, Delhi Group, regional meetings)

    Thank You

    Ivo Havinga at [email protected]

    Carol Carson at [email protected]

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