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GOAL AND TARGET ADDRESSED

Goal 1. Eradicate extreme poverty and hunger
Target 1.B: Achieve full and productive employment and decent work for all, including women and young people

DEFINITION AND METHOD OF COMPUTATION

Definition
The proportion of own-account workers and contributing family workers in total employment is defined as the proportion of workers in self-employment who do not have employees, and unpaid family workers in total employment.

This indicator is expressed as a percentage.

Concepts
Own-account workers are those workers who, working on their own account or with one or more partners, hold self-employment jobs and who have not engaged on a continuous basis any employees to work for them.

Contributing family workers, also known as unpaid family workers, are those workers who are self-employed in a market-oriented establishment operated by a related person living in the same household, who cannot be regarded as partners, because their degree of commitment to the operation of the establishment, in terms of working time or other factors to be determined by national circumstances, is not at a level comparable to that of the head of the establishment.

Self employment includes those jobs where the remuneration is directly dependent upon the profits (or the potential for profits) derived from the goods and services produced (where own consumption is considered to be part of profits).

Employees are all those workers who hold paid employment jobs, where the incumbents hold explicit (written or oral) or implicit employment contracts that give them a basic remuneration that is not directly dependent upon the revenue of the unit for which they work.

Employment refers to persons above the nationally defined working age (different in every country, but generally close to 15 years) who worked or held a job during a specified reference period. Included are persons who worked for pay or profit (or pay in kind); persons who were temporarily absent from a job for such reasons as illness, maternity or parental leave, holiday, training or industrial dispute; and unpaid family workers who worked for at least one hour, although many countries use a higher hour limit in their definition. The measure of employment is intended to capture persons working in both the formal and informal sectors.

Vulnerable employment is defined as the sum of the employment status groups of own-account workers and contributing family workers.

Method of computation
This indicator is calculated as the sum of contributing family workers and own-account workers divided by total employment multiplied by 100.

RATIONALE AND INTERPRETATION

Contributing family workers and own-account workers are less likely to have formal work arrangements, access to benefits or social protection programmes, and are more “at risk” to downturns in economic cycles. Therefore, these categories of workers are considered “vulnerable”. Vulnerable employment is a newly defined measure of persons who are employed under relatively precarious circumstances as determined by their status in employment.

There is a connection between vulnerable employment and poverty. If the proportion of vulnerable workers in total employment is sizeable, it may be an indication of widespread poverty. The connection arises because vulnerable workers lack social protection and safety nets to guard against poverty in periods of low economic demand. In addition, vulnerable workers are often incapable of generating sufficient savings for themselves and their families to offset declines in remuneration during economic downturns.

SOURCES AND DATA COLLECTION

Data are obtained from population censuses, labour force or other household surveys, establishment surveys, administrative records and official estimates based on results from several of these sources. Labour force surveys can be designed to cover virtually the entire population of a country, all branches of economic activity, all sectors of the economy, and all categories of workers, including own-account workers, unpaid family workers and persons engaged in casual work or marginal economic activity. For this reason, household-based labour force surveys offer a unique advantage for obtaining information on the labour market of a country and its structure.

However, labour force and household surveys may have limited geographical and population coverage. The ideal geographic coverage is the entire country (no geographic exclusions) and entire populations (no exclusion of population groups).

Other sources such as population censuses and administrative records differ in scope, coverage, units of measurement and methods of data collection. Each source has advantages and limitations in terms of the cost, quality and type of information gained.

DISAGGREGATION

Ideally, the data should be disaggregated by sex and age group. Information can also be disaggregated by urban/rural residence.

COMMENTS AND LIMITATIONS

Using the proportion of own-account and contributing family workers in total employment as an indicator of decent work is not without its limitations. Specifically, the jobs of some wage and salaried workers that are not included in the categorization of vulnerable workers might carry high economic risks, while some own-account workers might be quite well off and not vulnerable at all. Despite these limitations, vulnerable employment is especially relevant for the less developed economies and regions, and the fact that a strong correlation has been established between high poverty rates for a region and high shares of workers in vulnerable employment does substantiate the utility of the indicator to measure progress towards the goal of decent employment for all.

When using this indicator to assess vulnerable employment, differences in definitions and coverage over time (and across countries when making international comparisons) make comparisons difficult. Some definitional changes or differences in coverage can be overlooked— for example, differing age limits for measurement of employment. What is more important to note is that information from labour force surveys is not necessarily consistent with what is included in employment. For example, the information supplied in some countries may reflect civilian employment, which can result in an underestimation of “employees” and “workers not classifiable by status”, especially in countries that have large armed forces. Numbers of self-employed and contributing family workers would not be affected by this underestimation, but their relative shares in employment would be.

GENDER EQUALITY ISSUES

The indicator is highly gender sensitive since, historically, contributing family work is a status that is dominated by women. Consequently, women account for a disproportionate number of vulnerable workers in most countries.

DATA FOR GLOBAL AND REGIONAL MONITORING

Data for global and regional monitoring for this indicator are reported by the International Labour Organization (ILO). The majority of ILO data for this indicator reflect nationally-reported data collected by the ILO Bureau of Labour Statistics or other international organizations such as the Organization for Economic Co-operation and Development. ILO produces aggregate estimates for regions and groups of countries. Because not all countries report data every year, it is not possible to derive aggregate estimates of labour market indicators by merely summing across countries. To address this problem, the ILO maintains econometric models which are used to produce estimates of labour market indicators in the countries and years for which no real data exist. These models use multivariate regression techniques to impute missing values at the country level.

The ILO reports only available country-level information for this indicator. Therefore, no discrepancies between nationally reported and internationally reported data are likely to exist.

SUPPLEMENTARY INFORMATION



EXAMPLES



REFERENCES

See “REFERENCES” for Indicator 1.4.

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