Development Account Project on the IS: implementation of the ‘1-2 Survey’ in the ESCWA region Giovanni Savio, Statistic

1. Development Account Project on the IS: implementation of the ‘1-2 Survey’ in the ESCWA region Giovanni Savio, Statistics Division, UN-ESCWA Expert Group Meeting on National Accounts Cairo, 12 – 14 May 2009

2. General overview Project on “Interregional Cooperation on the Measurement of Informal Sector and Informal Employment” Activities carried out in Pilot Countries Outcomes, lessons learned and future steps Scheme of presentation

3. UN Regional Commissions

4. Budget of RCs from the following sources Regular Budget Regular Program for Technical Cooperation Extra Budget (i.e. DA Projects) DA projects aim at capacity-building through sub-regional, regional and inter-regional Technical Cooperation for developing countries Implemented as individual projects aimed at achieving distinct development impacts Budgetary Issues

5. Overall Budget: $ 800,000 Duration: 4 years, 2006 - 2009 Implementing agencies: ECLAC, ESCAP (leading agency), ESCWA ESCWA budget: $ 179,000 Steering Committee: UNSD, Regional Commissions, ILO and Delhi Group Project Facts

6. Project Countries ESCWA ESCAP ECLAC

7. Informal sector (employment & contribution to GDP) mostly not covered in official statistics Consequence: lack of exhaustivity Data collection typically based on ad hoc studies (i.e. not part of regular collection system) and with limited scope/coverage Data collected not internationally comparable Consequence:lack of coherency over time and across areas Finally, poor analysis and dissemination Reasons for DA Project

8. Reasons for DA Project Source: ILO (2002), Women and Men in the Informal Sector: A Statistical Picture

9. Reasons for DA Project • Informal Sector (Production) • Significant underestimation of GDP • Lack of info on characteristics of informal sector enterprises, use of technology, access to credit, training, markets, etc. • Lack of info on input-output relations between formal and informal sector enterprises • Informal Sector (Employment) • Implausibly low labor participation rates, especially for women • Lack of info on differentials in earnings and working conditions between formal/informal employment (poverty) • Lack of info on different social protection arrangements covering formal/informal employment Weaken the formulation, implementation and evaluation of policies and programmes aimed at promoting gender equality, eliminating child labour, generating decent work for all and reducing poverty

10. Objectives and Instruments B. Capacity building C. Data collection A. Advocacy D. Data analysis & Dissemination E. Knowledge management Overall Goal Improve the availability of informal sector and informal employment data 1. Raise awareness among stakeholders (NSOs, the Governments etc.) of developing countries on importance of collecting and disseminating data on informal sector 2. Improve technical capacity of NSOs to collect, compile, analyze and disseminate data on informal economy in line with international methods and standards

11. Partnership approach (RCs and other entities), and … … integration as far as concerns: Scope, coverage, definitions etc. Activities carried out However, adaptation of activities to the level of development of the NSSs Coordination with national and global statistics initiatives Consistency with international standards (e.g. 2008 SNA, Delhi Group, ILO etc.) Strategy of the Project

12. Raise awareness in stakeholders (concern on funding and sustainability of the approach for the future) Data on informal employment and informal sector GDP Country reports on: “1-2 Survey” methodology and its implementation “1-2 Survey” data analysis Dissemination Expected Outcomes

13. Sketch of Approach Unifying definition of the IS (XV ICLS Res.) 1. Household Sector 2.Unincorporated enterprises owned by households 3.a Own-account enterprises 3.b Enterprises of employers • 1. Size • 2. Registration • 3. Others 4. Informal sector enterprises

14. Sketch of Approach Unifying definition of the IS (XV ICLS Res.) Informal own-account enterprises Other own-account enterprises Own-account enterprises (1) Enterprises of employers Enterprises of informal employers Other enterprises of employers Informal sector Criteria: size, registration, others (2)

15. Concretely, how to go from step 3 to 4? Problems undermining comparability and coherence of IS estimates, for example: Registration requirements change over time, across countries and often registration is made with more entities In some countries all units should be registered with tax authorities Registration criterion reduces response rate and quality Registration of enterprise vs employees Cut-off size of employees may change over time, across countries (i.e. different levels of technology), may refer to empl. on continuous basis or total empl. or empl. observed in the reference period, and may depend on legislation and statistical considerations Sketch of Approach

16. Main dilemma: trade-off between flexibility and comparability The flexibility in delineating the IS according to ICLS Resolution hampers comparability of outcomes across countries and over time. However, flexibility in the adaptation of the criteria is an important characteristic Main features of the Unified Data Collection Strategy for the Informal Sector (UDCS-IS) Expanded scope of data collection, and flexibility ex-post non ex-ante (comparative analysis on criteria) Coherency with international recommendations Comprehensiveness (all areas, activities etc.) Sketch of Approach

17. Sketch of Approach HUEMs, starting point for Phase 2 data collection. Blue area, after (3) screening criteria applied in the LFS

18. HUEM1: Legal organization Production units that are not constituted as separate legal entities independently of their owners HUEM2: Book-keeping or accounting practice Production units that do not keep a complete set of accounts HUEM3: Product destination At least some of the products are sold/bartered in the market Sketch of Approach

19. Data colleted through variant of mixed household-enterprise survey called ‘1-2 Survey’ First phase: Household Survey, on which the sampling frame for the second phase is made Possibly build upon existing surveys with small changes, preferably LFS (extended) Second phase: Enterprise Survey Designed as a household-enterprise independent module based on outcomes of the extended LFS Sketch of Approach

20. Sketch of Approach

21. Participation in the ESCAP Workshop on Informal Employment and Informal Sector Data Collection: Strategy, Tools and Advocacy, Bangkok, September 2007 ESCWA Workshop on Informal Employment and Informal Sector Data Collection: Strategy, Tools and Advocacy for PCBS staff, with participation of Jordan DoS, Amman, April 2008 Signature of ESCWA-PCBS LoA to participate in the DA Project as Pilot Country, June 2008 Activities Completed

22. August 2008: Pilot “1-2 Survey” carried out by PCBS in West Bank September 2008: ESCWA Advisory mission to study results of the Pilot Survey September 2008: Preparation for the Survey (training) October 2008 - March 2009: Conduct of the “1-2 Survey” in West Bank and Gaza Strip Activities Completed

23. Quarterly LFS carried out by PCBS since 1995 Last survey samples based on 1997 Census updated in 2003 About 7,500 households interviewed each quarter, questionnaires completed about 6,000 each quarter “1-2 Survey”: Carried out during Q4, 4 October – 31 December 2008 on 11,338 households (7,644 in West Bank, 3,694 in Gaza Strip) PCBS LFS and ‘1-2 Survey’

24. Due to war, only 70% of Gaza sample was interviewed (2,553 over 3,694) Phase 2, before war:735 HUEMs found in West Bank, 163 in Gaza Strip interviewed Second Round, after war: Completed collection for Gaza Strip, extended the sample in the same region to Q1 2009 Final results expected by mid-April 2009 Second advisory mission of ESCWA to PCBS: end of April 2009 to analyze results PCBS LFS and ‘1-2 Survey’

25. Activities Planned

26. Consistency with international recommendations Great flexibility and adaptability Ex-post analysis and identification of IS Expanded scope Easy applicability, reduced costs for collecting information Information gathered possibly for use in various socio-economic studies and analyses Reliability of final results Ambition: extend application to other countries in the region Lessons learned (so far)