Understanding the Informal Economy in National Accounts Statistics
Explore the concept of the informal economy and its integration into GDP measurements. Learn about household enterprises, estimating GDP components, and the importance of identifying informal activities. Discover the different approaches and data sources used in estimating GDP in the informal sector.
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Regional Course on Informality: Definitions. Measurement, SDGs and Other Policy Indicators 16 20 October 2017 Chiba, Japan The informal economy in national accounts statistics Alick Nyasulu Lecturer/SIAP
Learning objectives Informal economy into GDP Underlying concept of informal economy The GDP-production boundary and the informal economy Estimating GDP components of the informal economy
Informal Economy Producing Units Household Enterprises Assets belong to owners Employment/Income Generation No contracts Owners personally liable for finance risk Low level organization/No distinction between labour & capital Production & household expenditure indistinguishable
Informal sector and Un-observed Economy Not observed, informal Observed, informal BC A Not Observed and informal 4
Estimating GDP Gross Domestic Product (GDP) is value of goods and services produced in an economic territory GDP Boundary Non- observed Informal Market Own-use Illegal/legal Potentially all goods/services that can be sold or be supplied to another unit
Estimating GDP The Production Approach Cost of inputs Value of Production Minus = Gross Value Added Sum of Gross Value Added of all activities is GDP
Estimating GDP The Production Approach Labour Costs Capital Goods Loans Cost of inputs Value of Production Excludes Includes Operating costs Raw materials Utility costs Other expenses other than labour and capital For sale For own use For all informal activities
Estimating GDP Estimation Process-Concept & Data Sources Identifying informal activities Potential Data Sources Mixed Surveys Population Census Some administrative data
Estimating GDP Estimation Process-Valuation of Transactions Market Production Non-Market Production Own Use Valuation Market Prices Basic Prices Prices Transactions
Estimating GDP When there is no data: What should you do? Indicators Output Indicators Input Indicators Informal Formal Employment/Minimum wage growth rates Employment/Expert opinions/Growth in neighbouring economies employment/Population growth/Business registrations
