Informal Economy: Definition and Survey Methods

Introduction from the paper:  An increasing concern in the National and International forums has been that the usual labour force surveys carried out at the country levels, do not capture the activity pattern of certain groups of workers, particularly women.  These workers obviously belong to the informal sector and their activities are mostly invisible. Information of such invisible groups of workers belonging to the informal sector would be available only if the required probes or questions are introduced in the survey questionnaire to obtain clear-cut answers to identify and categorise them.  Any failure in a survey to fully capture the activity pattern of such persons will underestimate the volume of employment in the informal sector.  Most of such workers are engaged in some entrepreneurial activities which have no fixed premises of operation and are not easily detected in a survey.  Obviously, an enterprise survey that does not fully capture such persons and their activities will underestimate the output generated in the informal sector.  It may therefore be necessary that any survey to estimate the size and output of informal sector should be linked and detailed probes undertaken to identify such persons also and account for their output.  With a view to field testing of questionnaires including the needed questions to identify the invisible groups of informal sector workers, their activities and the output from non-agricultural activities, GIDR-SEWA carried out the pilot survey in the rural and urban areas of Ahmedabad district of Gujarat State, India. The emphasis of the survey was to study the informal non-agricultural activities and the resulting output.