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Social Protection for
Informal Workers - a
Perspective from South
Asia
Ratna M. Sudarshan
Director, Institute of Social Studies Trust, New Delhi
Presented at Expert Group Meeting on Enhancing
Social Services Policies to Strengthen Family WellBeing in Asia and the Pacific, 17-19 October 2007,
Bangkok
Outline

Informal Economy
– Home based Work


Globalisation and Informality
Sources of Vulnerability
– The next generation



Breaking the Cycle: Bidi Workers Welfare
Fund
New Initiatives: NREGA, Social Security Bill
Strengthening Family Well being – best
strategies?
Defining informality
The informal economy: all production activities
carried out by informal workers in organized
and unorganized enterprises – small,
unregistered enterprises; unprotected workers.
 Statistically, definition of informal employment
includes a) employment in the informal sector (as
defined in 1993 by the ICLS); all unregistered (or
unincorporated) enterprises below a certain size,
including micro-enterprises owned by informal
employers who hire one or more employees on a
continuing basis; and own-account operations
and
 b) informal employment outside the informal sector.
(ICLS 2003)
THE INFORMAL ECONOMY

Definition proposed by National
Commission on Enterprises in the
Unorganised Sector
Based on conceptual framework proposed by 17 th
ICLS the NCEUS has proposed the following
definition of informal employment:
‘unorganised/ informal employment is defined as
consisting of casual and contributing family
workers; self employed persons in unorganized
sector and private households; and other
employees in organized and unorganized
enterprises not eligible either for paid sick or annual
leave or for any social security benefits given by the
employers’.
THE INFORMAL ECONOMY
Size of Informal Economy
80 -90% of total employment in South Asia:
 Contribution to GDP (eg India, 55 % - Raveendran
2006)
% of non agricultural workers who are informal:
 India, 1999-2000, all ages 67.3%
 Pakistan, 2001-2, 10 yrs+ 64.6%
 Bangladesh, 2002-3, 15 years + 62.4%
 Nepal, 1998-99, 15 years + 73.3%
 Sri Lanka, 2004, 10 years + 87% of total
employment (Unni, Jhabvala, Sinha)

THE INFORMAL ECONOMY
Locating Women:
Home Based Work, Unpaid Family Labour
Contributing Family Workers as % of labour force
Southern Asia
(UN.World’s
Women 2000)
Women
Men
40
11
Contributing Family Workers as % of employed population
(UNSD. World’s Women 05)
Women
Men
73
10
India
-
-
Nepal
13
6
Pakistan
47
16
21
4
Bangladesh
Sri Lanka
THE INFORMAL ECONOMY
Home Based Work
80% of the 50 million home based workers in South Asia are
women (ILO 2002)
Place of Work: Own Home:
Male
Female
(% of informal sector non
agricultural workers)
Pakistan (2001-2)
4.2
64.8
Bangladesh (2002-3)
20.7
71.0
India (1999-00)
11.1
35.5
12.3
51.3
(2004-5)
HOME BASED WORK
(Unni, Jhabvala, Sinha)
Home Based Work and
the Family


Historical evolution from home based
work for own or family use to
production for the market
Role as ‘workers’ overlaps and is
difficult to separate from role as ‘carer’
and in ‘provisioning for family’
HOME BASED WORK
Globalization and
informality

Informal employment not a creation of
globalization: however there has been increase in
last few years

Can distinguish between ‘old’ and ‘new’
forms:
‘old’ – crafts, home based production of bidi,
agarbathi, etc; vending, services like domestic
workers; skills acquired within family and entry
facilitated by family/ community

(some segments have contracted and others
expanded with economic growth)

GLOBALIZATION AND INFORMALITY
‘New’ informal employment –
Outsourcing, subcontracting, contractual
employment linked to formal enterprises
 Workers either shifted from regular to contract work
or have had to accept informal work although the
‘normal’ expectation would have been regular
employment
 This group can include skilled/ well educated
workers; reflects a pattern of growth in which
decisions to expand output are de-linked from
decisions to expand regular employment
‘Old’ - a group that has never had benefits; ‘new’- a
group that has lost actual (or potential) benefits.

GLOBALIZATION AND INFORMALITY
Sources of vulnerability of
informal workers
Nature of Work:
 Seasonality, low wages
 Uncertainty of work/ fluctuating annual income
 Lack of access to credit, technology, skill
 Difficulty in anticipating growth trajectory
 Health risks from work high, access to facilities low
 Limited access to any social security (health, old
age, maternity)
Limited options:
 Low levels of education/ formal skill training
 Social networks predominantly family/ community
centered
SOURCES OF VULNERABILITY
Household vulnerability
Dependence on one source of income = higher
levels of vulnerability, associated with higher levels
of poverty
Eg home based workers with high input of unpaid
family work

‘HBW’ households can be ‘family’ or ‘non-family’ units.
‘Family’ units - woman + husband mainly working for
HBW
‘Non-family’ units – with at least one adult woman
member of the household in ‘HBW’ and the male is
not engaged in mainly working for ‘HBW’.
In either case other family members may or may not
be involved in HBW. (NCAER 2001)
SOURCES OF VULNERABILITY
Poverty + transmission of
poverty to next generation

Non-enrolment/ early drop out – illiteracy

Only source for acquiring skills within family

Early entry into work

Lack of opportunities for acquiring other
skills at later age
NEXT GENERATION
Contribution of children


Estimate of total time spent by children in
home based work as a ratio to total time
spent on this by the household (no
allowance for differences in productivity,
etc)
The average contribution, for three sectors
(zardosi, bidi, agarbathi) together stands at
over 13 %, ranging from a low of 8% in Bidi
to 17% in zardosi work. (NCAER 2001)
NEXT GENERATION
Average Contribution of Children (in hours) to HBW
Sector
Hours worked by
children in a day (avg
no of hours* avg no
of children working
per hh)
Total no of
hours spent in
a day in HBW
by the
household
Proportionate
contribution of
children
2
13
15.4 %
Bidi
1.2
15
8%
Zardosi
3.5
20.6
17 %
All
2.30
17.4
13.2 %
Agarbathi
Note: these calculations are based on data on the average number of
persons in a household working in hbw and the average no. of hours
NEXT GENERATION
spent by each person.
Approaches to Social
Protection
Across South Asia, two-pronged approach to
social protection:
 benefits/ services available for those who
are ‘poor’/ below poverty line where there is
no recipient contribution;
 benefits available to workers in formal
employment, which are of a contributory
kind.
India: social protection
for informal workers






Labour laws/ Employees Insurance Scheme,
Provident Fund
Welfare Funds
Unorganised Sector Workers Social Security
Scheme (EPFO)
Universal Health Insurance Scheme
Umbrella legislation for social security to
unorganized workers
NREGA
Breaking the cycle: Bidi Workers
Welfare Fund: impact on children and
women
Differences are evident between bidi and other sectors (zardosi,
agarbathi):
 Relatively high share of HBW wages in total value of output
(being organized?)
 Greater use of government facilities by home based workers,
difference in health seeking behaviour of women
(entitlements through the welfare fund?)
 Proportion of children in school significantly greater than in
the other two sectors (scholarships offered by the Welfare
Fund?) (As a result, the contribution of children in this sector
is substantially lower than in the other two sectors)
However, coverage of the welfare fund and other programmes for bidi
workers is uneven.
POLICY INITIATIVES
Non government
approaches and innovations
SEWA health insurance
Micro insurance
Family cover
Maternity included

Challenges
Economic viability problematic
Infrastructure for health services inadequate
New initiatives – social protection/
social assistance
a. NREGA
b. Social Security for Unorganised Workers




Entitlements given to individual/ household as a
right and by the Central government
Problems in implementation
Designing for the family – creches, productive
assets created
Success in practice depends crucially on panchayat/
worker facilitation centres or in other words without
awareness and the capability to plan and manage
at the local level, the good intentions of the
legislation are unlikely to be translated into equally
good outcomes.
POLICY INITIATIVES
Entitlements and
Institutions
• ‘Pre conditions’ for success turn around the
enhancement of local capacities
• Citizenship based entitlements defined by
the state: need to put equal attention on
the institutions through which these
programmes are refracted. Good outcomes
depend on level of compliance
• Prioritise areas to maximise impact
POLICY INITIATIVES
Strengthening Family well
Being: Where are we at
present?




Recognise rights of informal workers
Sources of vulnerability and priority needs:
‘non conventional’ security needs such as
micro credit, skill upgradation and collective
investments: habitat and housing
Register and increase access to existing
health care, pensions, disability benefit,
maternity benefit
Organising to better access available
schemes; Strengthen bargaining power vis a
vis contractors/ employers
Strengthening Family well
Being: Where are we at
present?



Special vulnerabilities of ‘family units’
Recognise and protect against impact
of macro economic policies and growth
processes
Assumption: that the system will
deliver – if this is the problem, what
do we do to deal with it? Values,
norms and strategies