The Invisibility of Wage Employment in Statistics on the Informal Economy in Africa: Causes and Consequences: Matteo Rizzo, Blandina Kilama & Marc Wuyts
It is now common to argue that, in Africa, wage employment has become the exception and selfemployment the rule, mainly as a result of the growth of the informal economy. For example, Fox and Pimhidzai contrast the situation in OECD countries, where wage employment is the norm, with that in sub-Saharan Africa where, they argue, ‘employment takes the form of self and/or household employment, where a task is performed for family profit or gain (including for home food consumption). Most labour force participants never even enter the labour market’ (Fox & Pimhidzai, 2013, p. 3). Theirs is a belief widely held by policy-makers. The most recent labour force survey in Tanzania is no exception to this, as it suggests that working in one’s own business is by far the most prevalent type of employment relationship in the informal economy. This article questions this common assumption that self-employment is the dominant mode of
employment in the informal economy, and questions the wisdom of statistics on the informal labour force. The article starts by reviewing some key insights obtained from relevant economic theory, but also from the literature on the informal economy in Tanzania. Our aim is to understand how
conventional notions of ‘wage employment’ and ‘self-employment’ simultaneously fail to capture the nature and variety of employment relations in the informal economy, and yet these notions are central to the design of workforce surveys in developing countries. The article then uses the 2006 Integrated Labour Force Survey (NBS, 2007) to show that the informal economy is seen almost exclusively as the site of self-employment. The analysis then interrogates this claim by looking at the particular type of wage employment relationships that are found in one concrete sector of the informal economy in Tanzania, urban bus transport. The real labour relations at work therein and the categories and terms with which workers describe their employment situation are then contrasted with the categories and terms used to frame the questions in the latest available Integrated Labour Force Survey (ILFS) in Tanzania carried out in 2006. The article scrutinises how key employment concepts and terms have been translated from English into Swahili, how the translation biases respondents’ answers towards ‘selfemployment’, and how the translation then leads to the invisibility of wage labour in the collection of statistics on employment in the informal economy, both urban and rural. The article also looks at the consequences of this ‘statistical tragedy’. We argue that this assumption conflates varied forms of employment, including wage labour, that differ markedly in their modes of operation. Attention is also paid to the most significant trade-off faced by policy-makers in designing better labour force surveys.
Informal Economy as Self-Employment?