KILM 8: Employment in the informal economy

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8.1 Employment in the informal economy and its components as percentage of non-agricultural employment

​Introduction and Background

Summary of formal/informal employment in formal/informal sector

The KILM 8 indicator is a measure of employment in the informal sector as a percentage of total non-agricultural employment.

​a) Formal sector:
    Formal sector is an enterprise/business that is officially registered and kept a record of book of accounts (assets and expenditures).
Examples: People working in civil service, government service, etc

​b) Informal sector:
     Informal sector is an enterprise/business that is not officially registered and do not kept a record of book of accounts (assets and expenditures).
Example: online unregistered business.​

c)Formal employment:
   Formal employment are the people who work to receive a regular wage and assured certain rights Example: paid annual leave, paid sick leave.

​​d) Informal employment:
     Informal employment refers to jobs as observation units as opposed to the concept of informal sector that refers to production units as observation units. It is broader concept including:

​i) ​employment in the informal sector (except those rare employees in the sector who may have formal employment), and
ii) ​informal employment outside the informal sector

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