The Informal Economy: Derived Variables and Contribution Analysis
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Derived Variables and Contribution
of the Informal Economy
G.Raveendran
Important National Issues
Does informal sector/informal workers constitute a significant share
of workers in the country?
Do these workers make significant contribution to GDP?
Are these workers concentrated in any specific economic activity?
Do they belong to any specific categories of workers?
Are they located in specific geographical areas?
Are they concentrated among specific social groups?
Is there any gender differentials in informal sector/informal
workers?
What is the educational and poverty profile of informal
sector/informal workers?
Statistical Indicators
A number of statistical indicators are used by the
countries to find answers to the above questions.
A few of the common indicators are described below:
Share of informal sector workers
=(Number of informal sector workers/Total workers)*100
Share of informal workers
=(Number of informal workers/Total workers)*100
Statistical Indicators (Contd)
Share of informal economy workers
=(
Number of informal economy workers/Total workers)*100
GDP share of informal sector
=(GDP contribution of informal sector/Total GDP)*100
GDP share of informal workers
=(GDP contribution of informal workers/Total GDP)*100
GDP share of informal economy
=(GDP contribution of informal economy/Total GDP)*100
[These indicators can be computed for specific economic
activity/sector]
Statistical Indicators (Contd)
Gender differential
=(
Informal women workers/Total women workers)/
(Informal men workers/Total men workers)*100
Incidence of informality by social group
=(
Informal workers of a specific social group/Total workers of
that social group)*100
Incidence of informality by education
=(
Informal workers of specific educational
level/Total workers
of that
educational level)*100
ESTIMATION OF GROSS VALUE ADDED
Total receipts
Total operating expenses
Distributive expenses, if any
Excise duty
Sales tax
Non-deductible vat
Outward freight and transport charges
Commission to selling agents, etc
.
Gross value added= Total receipts - Total operating
expenses - Distributive expenses
Total Receipts
Value of goods manufactured
Value goods sold in the same condition as purchased
Changes in the stock of semi-finished products
Receipts from services provided to others including
commission charges
Value of own construction of building, furniture and
fixtures
Rental received from fixed assets
Value of consumption of goods/services produced
Funding/donations received excluding capital grants
TOTAL OPERATING EXPENSES
Raw materials consumed
Purchase value of goods sold in the same condition
Electricity charges
Fuel and lubricant
Raw materials for own construction
Rent payable on machinery and building
Contract and commission expenses
Travelling, freight and cartage expenses
Communication expenses
TOTAL OPERATING EXPENSES (Contd)
Purchase of consumable stores, packing materials, etc.
Purchase value of goods sold in the same condition
Paper, printing and stationery
Service charges for work done by other establishments
License fee, cess charged by local bodies, etc.
Minor repair and maintenance of building, furniture,
machinery, etc.
Other expenses, if any.
SCALING UP
Enterprise surveys often underestimates total
employment in specific industries due to several reasons
including:
Invisible enterprises
Non-reporting of enterprises by households
Under reporting of employment, etc.
Scaling up is done by multiplying the estimates of jobs
derived from labour force surveys with the average
value added per worker derived from enterprise surveys
WIEGO
WIEGO
Exploring the significance of the informal sector in national economies, this content delves into the share of informal workers, their GDP contributions, concentration in economic activities, worker categories, geographical distribution, social group concentration, gender differentials, educational and poverty profiles. Statistical indicators and estimation of gross value added are also discussed.
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Presentation Transcript
Derived Variables and Contribution of the Informal Economy G.Raveendran
Important National Issues Does informal sector/informal workers constitute a significant share of workers in the country? Do these workers make significant contribution to GDP? Are these workers concentrated in any specific economic activity? Do they belong to any specific categories of workers? Are they located in specific geographical areas? Are they concentrated among specific social groups? Is there any gender differentials in informal sector/informal workers? What is the educational and poverty profile of informal sector/informal workers?
Statistical Indicators A number of statistical indicators are used by the countries to find answers to the above questions. A few of the common indicators are described below: Share of informal sector workers =(Number of informal sector workers/Total workers)*100 Share of informal workers =(Number of informal workers/Total workers)*100
Statistical Indicators (Contd) Share of informal economy workers =(Number of informal economy workers/Total workers)*100 GDP share of informal sector =(GDP contribution of informal sector/Total GDP)*100 GDP share of informal workers =(GDP contribution of informal workers/Total GDP)*100 GDP share of informal economy =(GDP contribution of informal economy/Total GDP)*100 [These indicators can be computed for specific economic activity/sector]
Statistical Indicators (Contd) Gender differential =(Informal women workers/Total women workers)/ (Informal men workers/Total men workers)*100 Incidence of informality by social group =(Informal workers of a specific social group/Total workers of that social group)*100 Incidence of informality by education =(Informal workers of specific educational level/Total workers of that educational level)*100
ESTIMATION OF GROSS VALUE ADDED Total receipts Total operating expenses Distributive expenses, if any Excise duty Sales tax Non-deductible vat Outward freight and transport charges Commission to selling agents, etc. Gross value added= Total receipts - Total operating expenses - Distributive expenses
Total Receipts Value of goods manufactured Value goods sold in the same condition as purchased Changes in the stock of semi-finished products Receipts from services provided to others including commission charges Value of own construction of building, furniture and fixtures Rental received from fixed assets Value of consumption of goods/services produced Funding/donations received excluding capital grants
TOTAL OPERATING EXPENSES Raw materials consumed Purchase value of goods sold in the same condition Electricity charges Fuel and lubricant Raw materials for own construction Rent payable on machinery and building Contract and commission expenses Travelling, freight and cartage expenses Communication expenses
TOTAL OPERATING EXPENSES (Contd) Purchase of consumable stores, packing materials, etc. Purchase value of goods sold in the same condition Paper, printing and stationery Service charges for work done by other establishments License fee, cess charged by local bodies, etc. Minor repair and maintenance of building, furniture, machinery, etc. Other expenses, if any.
SCALING UP Enterprise surveys often underestimates total employment in specific industries due to several reasons including: Invisible enterprises Non-reporting of enterprises by households Under reporting of employment, etc. Scaling up is done by multiplying the estimates of jobs derived from labour force surveys with the average value added per worker derived from enterprise surveys
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