This paper has been written to stimulate discussion on the definition and measurement of informal employment in developed economies. Much has been written on the definitions of informal employment and the informal sector in the context of developing countries, and these definitions have been applied in collecting and analyzing data from labor force, multi-purpose household, and enterprise surveys. It is less common that the recommendations and techniques for measuring informal employment and informal sector have been applied in developed countries.
In high-income economies, it is more common to speak of ‘nonstandard’ or ‘atypical’ employment. The two concepts of ‘informal employment’ and ‘nonstandard employment’ are not identical. Informal employment typically refers to employment that is not subject to legal, social or economic regulations/protections. That is, the emphasis is on the regulatory status of the job or the enterprise. ‘Nonstandard employment’ refers to variations in the employment relationship relative to a dominant or traditional form. In this case, the emphasis is on the economic arrangement and the nature of the employment contract (be it explicit or implied).
In some circumstances, non-standard employment is defined analogously to informal employment. However, nonstandard employment more frequently refers to employment arrangements which are short-term and contingent in nature (e.g. short-term hires and day laborers), which are characterized by partial employment or volatile work-time regimes (e.g. part-time and on-call employment), or which sit uneasily between the standard employment status categories of ‘paid employee’ or ‘self-employed.’ Nonstandard employment is frequently associated with a reduced level of social and regulatory protection (that is, nonstandard work is also often informal).
Our aim in this short paper is to raise a number of issues which we think are important when linking concepts and definitions of informal employment and nonstandard employment. The objective is to move closer to a framework for developed countries that can be used to measure informal employment in a way that is conceptually consistent with the approaches used to measure informal employment in developing countries.
Carré, Françoise and Heintz, James, "Issues in Developing a Common Framework on Informal Employment" (2009). Center for Social Policy Publications. Paper 6.