Alternative definitions of informal sector employment in South Africa
Stellenbosch Working Paper Series No. WP21/2008Publication date: 2008
Author(s):
[protected email address] (Department of Economics, University of Stellenbosch)
Before the introduction of the Quarterly Labour Force Survey (QLFS) in 2008, Statistics South Africa (Stats SA) has been using the same methodology to derive the informal sector employment throughout the years, focusing on the enterprise registration status to classify workers (which include both self-employed and employees) as either formal or informal sector workers. Although there are difficulties with attempting to provide any consistent trend data (Yu, 2007 & Essop & Yu, 2008), it is generally accepted that informal sector employment grew relatively more rapidly in the late 1990s, and then stabilized at about 2 million in the early 2000s before it increased (albeit more slowly) again since 2005. Nonetheless, recent papers by Devey, Skinner & Valodia (2006) as well as Heintz & Posel (2008) argue that the current classifications used by Stats SA hide a significant degree of informality in the formal economy, as some formal jobs are characterized by conditions that are typical of informal work. Therefore, they propose alternative definitions of informal sector employment, focusing on worker characteristics instead of enterprise characteristics. This paper aims to address the reliability or otherwise of these recent approaches, as well as to suggest better ways to define informal sector employment.
JEL Classification:J00
Keywords:South Africa, Household survey, Labour market trends, Informal sector
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Upcoming Seminars
Monday 28 July 202512:00-13:00
Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
Topic: "TBC"
12:00-13:00
Prof Willem Boshoff
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
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Prof Derek Yu: University Of The Western Cape
Topic: "Examining the teaching, assessment and research activities of the South African Economics Departments"
BER Weekly
13 Jun 2025 Another global flashpoint ignites as Israel attacks Iran’s nuclear facilitiesThe story for the week was initially relatively positive, with the overarching narrative being that the US and China agreed on a trade truce. However, overnight, Israel struck Iran’s nuclear facilities, military sites and killed senior commanders in dozens of strikes. While Israel has attacked Iran before, this is the first time nuclear facilities were...
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