WP03/2008

The South African informal sector (1997 – 2006)

Stellenbosch Working Paper Series No. WP03/2008

Author(s): Hassan Essop, Derek Yu

JEL Classification: J00

Keywords: South Africa, Household survey, Labour market trends, informal sector

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Abstract:

According to the 2006 September Labour Force Survey, approximately 22% of the employed (excluding domestic workers and agricultural employment) are engaged in informal sector activities as their main work to sustain themselves and their dependents. Given the large size of the informal sector in relation to the formal sector, it is imperative to understand the dynamics and trends within the informal sector. This paper provides a detailed quantitative descriptive analysis of the South African informal sector between 1997 and 2006 using the October Household Survey and the Labour Force Survey data, adding to the work on informal markets done by authors such as Devey, Skinner & Valodia (2003, 2006a, 2006b), Muller (2003) and Muller & Posel (2004). Such an analysis could not only enhance the informal sector literature currently available, but also increase the depth of analysis available to policy makers.