Measuring Informality

The “informal economy” refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements”. Informality poses serious challenges to workers (decent work deficits, poverty and vulnerability), economic units (low productivity and lack of access to finance and markets) and Governments (issue of governance and rule of law, limited fiscal space). In many countries, informal employment and informal sector economic units represent a significant part of the economy and labour market and plays a major role in production, employment creation and income generation. The debate concerning strategies towards formalization of the informal economy gained new momentum worldwide, after ILO’s constituents adopted, at the International Labour Conference in June 2015, the Recommendation 204 (R204), the first international standard focusing exclusively on the informal economy and the strategies to adopt for the transition from the informal economy to the formal economy. This new instrument constitutes a historic landmark, not only to ILO constituents but also to all those who are concerned with inclusive development, poverty eradication, and reducing inequalities. R204 is an operational tool towards the achievement of the new Sustainable Development Goals (SDGs) where formalization is within the key indicators of Goal 8 – to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. Measuring and analysing informality remains a challenge for many developing countries that hinders policy-making, as the informal economy’s economic contribution is missing due to the lack of data and statistics concerning the informal economy. Bearing in mind the growing demand from countries to better understand the functioning of the informal economy and the measurement of informality, the International Training Centre of the ILO in Turin (ITCILO) in close collaboration with the ILO Department of Statistics are proud to offer this E-Learning course “Measuring Informality”. OBJECTIVES The course also aims to promote the collection of data on the number of entrepreneurs and economic units in the informal economy, and their characteristics, as an integral part of national labour statistics, following R.204 guidelines on promoting formalization at national level for evidence-based labour market policies.” The specific learning objectives of the course will include: • Comprehensive understanding of the key international concepts, terminology, guiding principles, global trends related to informality; • Comprehensive understanding the operational definitions of Informal sector and informal employment; • Better understanding of the data collection process in relation to informality and understand the various measurement mechanisms; • Comprehensive understanding of the various indicators on work in the informal economy • Improve understanding about the relationship between informality and working conditions; • Ample understanding of the national diagnostic of informality and how it supports decision-making; • Better understanding of the main economic and environmental drivers that support transition to formality. CONTENT • Statistical definitions: the Informal Economy • From data to derived variables • Going from derived variables to indicators on work in the informal economy • National diagnostic of informality or how data support decisions about priorities and inform the development and monitoring of policy • Statistical definitions: Operational definition of the informal sector and informal employment • Data collection instruments • Informality & working conditions: to what extent decent work deficits are more critical in the informal economy? • Contextualizing data and indicators, analysis of other drivers and conditions as part of the economic and institutional environment to support transition to formality NUMBER OF HOURS: 60