Developing countries differ with regard to the number of people employed in the informal sector. Total employment in the informal economy in South Africa (including domestic work and subsistence agriculture) is estimated to be between 25 per cent (Devey et al., 2003) and 34 per cent respectively (ILO, 2002). Reported numbers of people in informal employment differs, depending on the refinement of data collection to capture informal sector work. Devey et al. (2003) report that the perceived increase in the number of South Africans engaged in informal employment from 965 000 in 1997 to 1 873 000 in 2001, is partly attributable to improvements in collection of survey data from the October Household Surveys and the Labour Force Surveys. In India, in 2000, 93 per cent of the population, or 370 million people, were engaged in the informal sector and in Mexico in 1998, 64 per cent of employment was in the informal sector (ILO, 2002).
Informal employment in South Africa is concentrated in domestic services and agriculture. These sectors combined account for 52 per cent of employment in the informal economy (ILO, 2002). In India, the informal workforce is segmented into informal employment in agriculture (representing 60 per cent of total employment), informal enterprises (representing 28 per cent of total informal employment), and informal employment outside informal enterprises (representing six per cent of the total informal workforce) (ILO, 2002).
Gender differences are apparent in the informal economy. In 2000, 2.4 million women and 1.6 million men were employed in the informal economy in South Africa. In India, 118 million women, mainly concentrated in agriculture, and 252 million men worked in the informal economy (ILO, 2002). In Mexico, men dominate the informal economy; 16 million men worked in the informal sector in 2000 compared to 7.7 million women (ILO, 2002).
Table 3.2 Composition of employment in the informal economy, South Africa 2000 (ILO, 2002)
Total Women Men
Total employment 11,946,000 5,434,000 65,511,000
Total non-agricultural employment 10,110,000 4,581,000 5,528,000
Total agricultural employment 1,836,000 853,000 983,000
Total informal employment
Number of persons 4,063,000 2,449,000 1,613,000
Percentage of total employment 34 45 25
Employment in informal enterprises
Number of persons 3,059,000 1,486,000 1,572,000
Percentage of total employment 26 27 24
Percentage of total informal employment 75 61 97
Non-agricultural employment in informal enterprises
Number of persons 1,977,00 888,000 1,088,000
Percentage of total employment 17 16 17
Percentage of non-agricultural employment
20 19 20
Percentage of total informal employment 49 36 67
Agricultural employment in informal enterprises
Number of persons 1,082,000 598,000 484,000
Percentage of total employment 9 11 7
Percentage of agricultural employment 59 70 49
Percentage of total informal employment 27 24 30
Employment in paid domestic work
Number of persons 1,004,000 963,000 41,000
Percentage of total employment 8 18 1
Percentage of total informal employment 25 39 3
In 2000 in India and South Africa, women dominated employment in the informal sector (ILO, 2002). In South Africa in 2000 (table 3.2), women were more likely than men to work in the informal sector, representing about 60 per cent of informal workers in trade and 55 per cent in agriculture, manufacturing, community and personal services (ILO, 2002). Domestic work accounted for 39 per cent of total informal employment for women (ILO, 2002). In India in 2000, 18 per cent of women in the informal economy worked in informal enterprises, 43 per cent worked in manufacturing and 28 per cent in trade (ILO, 2002). In Mexico, in 2000, 94 per cent of women were informally employed in agriculture and 80 per cent in trade (ILO, 2002).
Kenny and Webster (1999) argue that the South African labour market is polarised between those in secure employment with high incomes and those in informal or flexible work with relatively low incomes. Women fall into the vulnerable and least profitable segments of the informal economy. According to Sethuraman (1999), even though men and women participate in the same trade, the types of activities or employment undertaken differ. Men typically have larger businesses and trade in non-perishable items. Women generally tend to have smaller operations and often trade in food items (Chen et al., 2002).
Lund and Skinner (1999) reported that the South African informal economy is segmented along racial and gender lines. Devey et al. (2003) report that between 1997 and 2001, 84.5 per cent of all workers in the informal economy were Africans involved in semi- skilled occupations, followed by craft related occupations (25.5 per cent) and service and shop workers (20 per cent). Africans tend to occupy lower income niches in the informal economy such as street trading and taxi-driving while whites tend to trade in luxury goods at flea-markets, and Indians tend to control profitable niches such as flower-selling (Rogerson, 2000a).
3.4.COMMON METHODS USED TO MEASURE THE INFORMAL ECONOMY AND TYPES OF STUDIES CONDUCTED IN THE INFORMAL SECTOR This section briefly discusses common methods used to measure aspects of the informal economy. Methods used to measure the informal sector depend on who is undertaking the research and the purpose of the research. Large organisations such as the International Labour Office and national governments usually undertake statistical surveys to estimate the size of the informal sector; the number of people in various segments of the informal economy; the number of men and women involved in different types of informal sector work and the contribution of the informal sector to the gross domestic product.
National surveys provide statistical and numerical accounts of the informal sector.
National survey approaches seeks to improve statistical methods to measure sources of income, income levels and the size of the informal sector (ILO, 2002). Socio-economic information on the informal sector has been poorly documented. To fill this gap, the ILO has partnered with informal sector organisations such as HomeNet (an organisation representing home workers), StreetNet (an organisation representing street traders), Women in Informal Employment Globalising and Organising (WIEGO) and national governments (including South Africa), to collected statistical information on the informal sector (ILO, 2002; Mitullah, 2004).
A national scale survey commonly estimates total informal employment and major informal categories outside of agriculture. Sources of information for national surveys are population census surveys, labour force surveys or household surveys that cross-classify industrial sectors by employment status and gender (ILO, 2002). Other common methods measuring the informal sector are presented in table 3.3. Quantitative, qualitative and participatory research methods are used to measure different aspects of the informal economy, depending on the scale of the research and research objectives.
The key distinction between using quantitative methods and qualitative methods is that quantitative surveys enumerate the informal sector (such as size, composition and contribution to gross domestic product), while qualitative methods focus on individuals
engaged in informal work and investigate the socio-economic elements of informal sector livelihoods. Qualitative methods such as interviews and focus group discussions allow for in-depth discussions; exploration of personal histories and detailed responses (Bouma
& Atkinson, 1995: 206-08; Terre Blanche et al., 2006: 272).
Table 3.3 Types of studies conducted in the informal sector
Author and
publication date Location Sector Methodology
Bromley (1978). Cali, Columbia. Street traders. Surveys; participant and non-participant observation; semi-structured
interviews; key informant interviews and tape recorded life histories.
Dasgupta (1992a:
117-123).
Calcutta, India. Street based-petty traders.
Survey: questionnaire and statistical analysis.
Bernstein and Gray
(1994). Durban. All. Interviews.
Evers and Mehmet
(1994). Central Java,
Indonesia. Informal traders. Survey.
Fandane (1998). Warwick Avenue,
Durban. All. Interviews.
Levin et al. (1999). Accra, Ghana. Traders and
vendors. Household surveys and statistical analysis.
Lund and Skinner (1999).
South Africa (national focus).
All, with a focus on street traders.
Focus group discussions; interviews;
local policy dialogue and telephone interviews.
Skinner (1999). Durban. Street trading. Key informant interviews; local policy dialogue; focus group interviews.
Skinner (2000b). Durban. Street traders. In-depth telephone and face to face and key informant interviews.
Ward and Gilbert
(2001). Anloga, Ghana. Carpenters operating micro and small enterprises.
Key informant interviews; wealth ranking; focus group discussions;
transect walk, technological capabilities assessment and individual firm
questionnaires.
DfID (2002). East Africa:
Tanzania; Uganda;
Kenya and Ethiopia.
Urban livestock
sellers. Case studies with a combination of questionnaires and stakeholder meetings.
Kassim and Hendriks (2002).
Pietermaritzburg. Micro- entrepreneurs.
Case studies (interviews).
Mayrhofer and
Hendriks (2003). Pietermaritzburg. Street traders. Interviews; telephonic semi-structured interviews with service providers.
Hunter and
Skinner (2003). Durban. Street traders. Interviews.
Olsen and Larsen
(2003). Himalayas, Nepal. Medicinal plant
traders. National survey: open-ended interviews and a village survey using a daily record of household activities.
Ligthelm (2005). South Africa. Spaza shops. Survey: a pre-structured questionnaire.
NDC andYEDP Pietermaritzburg. All. Surveys.
Bromley (1978: 166) reported that the use of social research methods such as questionnaires, participant and non-participant observation, semi-structured interviews with informants and tape recorded life histories uncovered the dynamics of informal sector employment relationships that were “rarely admitted in more superficial questionnaire surveys”. Most studies presented in table 3.3 used qualitative methodologies such as interviews, case studies and focus group discussions. The merits of these research instruments will be discussed in chapter four.
In participatory methodologies the „research participant‟ is part of the research process.
Innovative tools such as drawing and mapping encourage sub-conscious reflection and elicit information not captured in surveys and sensitive information (such as income) that traders do not feel comfortable discussing (Maxwell et al., 1997; Development of Dynamic Women‟s Enterprise in Business and Art (DWEBA), 2001). These are further discussed in chapter four.
The review of informal sector studies presented here is by no means exhaustive. Only one study of carpenters operating small and micro-enterprises used participatory methods such as wealth ranking and transect walks and integrated ranking, venn diagrams and matrix scoring with focus group discussions (Ward & Gilbert, 2001). The use of these participatory tools led to Ward and Gilbert (2001) identifying key micro-enterprise constraints such as poor infrastructure and led to carpenters identifying their own interventions such as training and business relocation.