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May 2014

MEETING OF THE GROUP ON EXPERTS OF NATIONAL ACCOUNTS. “Explicit Measurement of the Informal Economy in the framework of the SCNM Change Year Base 2008”. INEGI General Direction of Economic Statistics Deputy General Direction of National Accounts. May 2014. Contents. Objective.

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May 2014

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  1. MEETING OF THE GROUP ON EXPERTS OF NATIONAL ACCOUNTS “Explicit Measurement of the Informal Economy in the framework of the SCNM Change Year Base 2008” INEGI General Direction of Economic Statistics Deputy General Direction of National Accounts May 2014

  2. Contents Objective Sources of Statistical Information Theoretical and Conceptual Framework Methodological Framework A measurement for the Mexican case

  3. Objective • Obtain an explicit measurement of the Informal Economy value, in the framework of the System of National Accounts of Mexico 2008 (SCNM08) aligned with the set the International Organizations guidelines: • Informality index • Production account informal main components • Occupied personnel in Informality Classification used is The North American Industrial Classification System 2007 (NAICS07) for 56 subsectors of the Mexican economy.

  4. StatisticalInformation Sources Statistical Information: • 2009 Economic Censuses (CE, CensosEconómicos 2009 • National Survey of Households Income and Expenditure (ENIGH, EncuestaNacional de Ingreso – Gasto de los Hogares) • National Survey of Occupation and Employment (ENOE, EncuestaNacional de Ocupación y Empleo) • National Survey of Micro-business (ENAMIN, EncuestaNacional de Micronegocios)

  5. StatisticalInformation Sources

  6. Theoretical and Conceptual Framework For the subject of informality phenomena the statistical measurement, the norms and recommendations have been settled by the international agencies considering the following: • International Conferences of Labor Statisticians (ICLS XV and ICLS XVII). • The Non-Observed Economy Manual (NOE) 2002 chapter 12 section 12.4. • The 2008 System of National Accounts (2008 SNA) chapter 25.

  7. Theoretical and Conceptual Framework • ICLS XVII (2003) • Informal Employment • Distinguishing: • Informal economy employment, • Informal employment, • Employment in the informal sector • And Informal employment out of the informal sector and the informal employment. • Disaggregation of informal employment by type production unit. • ICLS XV (1993) • Informal Sector • Units engaged in the production of goods and/or services. • Employment and income generator. • Non incorporated as legal entities. • Lack of capital accounting.

  8. Measuring Informality: a statistical manual on the informal sector and informal employmentpublished by the ILO (2012)

  9. ILO: Informal Sector and Informal Employment * Producers' co-operatives, witch are not formally established as legal entities, are treated as private unincorporated enterprises. Persons working in such informal co-operatives are included in one of the other categories of status in employment, and their jobs classified accordingly. Matriz Hussmanns: México

  10. Theoretical and Conceptual Framework NAICS 2007 Source: Self prepared with SCNM 2008 data

  11. Theoretical and Conceptual Framework NAICS 2007 Sector 11. Agriculture, Animal Breeding and Farming, Forestry, Fishing and Hunting. It is important to emphasize that in this study about informality are considered implicitly the following: . • Jobs estimated in function of required labor days by product without distinguishing employment features. • In Mexico, the agricultural property is assigned to peasants as private property socially named Ejido. Meaning that Mexican peasants have assets that they can sell, transform or extinguish.

  12. Methodological Framework The current method in INEGI is the Direct Method for measuring total Informal Economy, from direct sources such as the Surveys of Employment and Micro-business. The statistical technique for obtaining the explicit measurement by subsectors of the Informal Economy is the “Method of the Latent Variable”, characterized by an unobserved variable explained from known indicators. Such technique reduces the dimensionality of the set of observations keeping the major part of the feasible information of the study set.

  13. Methodological Framework METHODS FOR ESTIMATING THE GROSS VALUE ADDED THE INFORMAL SECTOR (GVAIS) • Latent Variable Method applied to income of the matrix of employment for position in the occupation. • Vector (56X1) = Multiplication Index Informality by the level of Gross Value Added.

  14. Main Results Measurement for Mexico in 2008 The GDP of informal activity, incorporating the informal sector and informal employment, contributed to the national GDP to 25.49% in 2008.

  15. Thank you! Because we provide information for everybody…01 800 111 46 34www.inegi.org.mxatencion.usuarios@inegi.org.mxMexico counts with INEGI!

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