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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsTo measure informal businesses’ contribution to a local economy, first define what counts as an informal business, then estimate how many such businesses and jobs there are, and add a defensible measure of economic activity—usually output or gross value added (GVA). No single survey or register is automatically complete. A credible estimate states its boundaries, combines or selects data sources to suit local coverage, and explains what may have been missed.
Define what you are measuring
“Informal businesses” can refer to enterprises in the informal sector; it is not interchangeable with informal employment. The distinction determines what your estimate includes.
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- Informal sector is an enterprise-based statistical category. Under relevant international standards, it covers household-owned, unincorporated production units meeting the applicable criteria.
- Employment in the informal sector counts jobs in those enterprises.
- Informal employment is job-based. It can include informal jobs in formal businesses, informal businesses, and households.
The International Labour Organization (ILO) explains this distinction in its 13 June 2011 statistical update on employment in the informal economy. A study of informal businesses should normally estimate enterprise activity, but may also report informal employment as a separate measure. Do not present the two as if they describe the same population.
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Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →Before collecting or combining data, write down the estimand: the precise quantity the study intends to estimate. Decide whether it covers the number and characteristics of informal-sector businesses, informal employment across all relevant enterprise types and households, or both. Keep the business unit, worker, and job distinct—one person may hold several jobs, and a business may employ several people.
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Set the boundary
Specify the local geography and reference period, and state how the estimate treats agriculture, household production for own use, unpaid contributing family workers, multiple jobholders, and businesses operating across local boundaries. These choices can materially change the count. They should be explicit rather than treated as universal conventions.
Choose data sources based on coverage
Start with an inventory of what exists locally; do not assume that any one source captures all informal activity. The ILO’s 2013 Measuring informality: A statistical manual on the informal sector and informal employment describes household surveys, including labour-force surveys, enterprise surveys, establishment surveys or censuses, and mixed household-enterprise surveys as alternative approaches.
For each possible source, record the population it covers, the unit counted, update frequency, geographic and industry detail, available worker and business variables, and likely omissions—especially unregistered businesses. Potential sources to check include household and labour-force surveys, economic censuses or establishment data, business registers, licensing and tax records, and community-based lists. Their availability, legal access, completeness, and suitability vary by place. Assess confidentiality and permitted use before linking or publishing records.
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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11| Design | What it can capture | Main dependency or trade-off |
|---|---|---|
| Household or labour-force survey | Workers and household-based business operators, including people whose enterprises may not appear in business registers. | Results depend on survey questions, sample design, and the ability to identify and describe businesses through household respondents. |
| Enterprise or establishment survey | Business-level details such as employment, sales, and costs, where collected. | Requires a usable frame; businesses absent from the register or list may be missed. |
| Mixed household-enterprise survey | Can identify operators through households and then gather more detailed information about their businesses. | Connects worker and enterprise information, but requires more complex fieldwork. |
These trade-offs follow from the source populations and methods described in the ILO manual; they are not guarantees that a given source will perform the same way in every locality. Where no dependable register exists, household listing followed by enterprise interviews is one possible design. Where registers are more complete, an enterprise or establishment survey may be efficient, provided its omissions are assessed. Compare options against the local frame, budget, desired detail, timing, and measurement objective.
Classify businesses and jobs consistently
Use internationally aligned concepts and questions where possible, and preserve the underlying answers—not just a final “formal” or “informal” label. Registration alone is not a complete test of informality: registration, incorporation, recordkeeping, employment arrangements, social protection, and legal coverage describe different features. A business may meet one criterion and not another.
The ILO’s Survey Questions for Collecting Data on Work Relationships and Informality, published 9 December 2024, provides recommended questions reflecting the 20th International Conference of Labour Statisticians (ICLS) work-relationship classification, ICSE-18, and the 21st ICLS resolution on statistics for the informal economy. Using standardized concepts and question wording helps make results easier to interpret and compare. Document any local adaptations and the rules used to classify units and jobs.
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Estimate scale and economic contribution separately
Count businesses, people, and jobs
Report the number of in-scope businesses and the number of people or jobs engaged in them. Label each measure precisely: persons are not the same as jobs, and main jobs are not the same as all jobs held. If the design supports it, break results down by local area and broad industry. Worker characteristics, hours, and earnings can add useful distributional detail, but only publish breakdowns the sample can support and confidentiality rules allow.
Measure output or gross value added
Business and employment counts show scale; they do not, by themselves, quantify economic contribution. Add an economic aggregate, such as output or GVA. Output is the value of goods and services produced under the chosen accounting concept. GVA is output less intermediate consumption—the value of goods and services used up in production. The ILO’s 2014 Women and Men in the Informal Economy: A Statistical Picture identifies the informal sector’s contribution to total GDP or GVA as a key indicator, with informal employment as an additional policy-relevant dimension.
Use data and methods compatible with the national accounting framework in use, and document how missing business values are estimated. State whether reported values are gross or net of intermediate inputs and nominal or adjusted for price changes. Explain how owner-operated businesses and household-business accounts are treated. Do not add business sales to wages or household spending and call the total “contribution”: those figures can overlap or describe different sides of the same activity.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Account for activity that data sources miss
Informal businesses are only one part of the wider non-observed economy. The term also covers productive activity that basic statistical data may miss because it is underground, illegal, intended for household own use, informal, or omitted through data deficiencies. A register-based survey can therefore undercount activity even when its records are accurate for the units it contains.
The OECD/ILO’s 2002 Measuring the non-observed economy: A handbook describes two complementary responses: improve direct measurement through data collection, and improve indirect measurement during national-accounts compilation. In practical terms, that can mean improving coverage and questions in surveys while also applying documented adjustments in national accounts. An indirect adjustment may improve an aggregate estimate without identifying the individual businesses or workers responsible; do not imply otherwise unless the method actually identifies them.
Report uncertainty in a way that matches the design. For probability samples, include appropriate sampling-error measures. For any design, describe nonresponse, frame undercoverage, imputation, seasonal activity, and hard-to-enumerate groups. If a result depends on uncertain coverage or assumptions, show a sensitivity range where feasible or explain the limitation plainly.
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Publish enough detail to make the estimate interpretable
Alongside each result, report the target population, geographic boundary, reference period, definitions, sources, estimation steps, and known omissions. Make clear whether a figure describes informal-sector businesses, employment in those businesses, informal employment across enterprise types, or another explicitly defined population. This documentation helps readers understand what a local estimate can—and cannot—be compared with.
For statistical teams planning a survey or programme, the ILO’s 2013 Measuring informality: A statistical manual on the informal sector and informal employment is a technical reference covering measurement approaches, reporting, dissemination, and national-accounts use. Availability may vary by location and format.
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