Informal Employment, Poverty & Growth in India & China

Informal Market - Street Vending, India

China India Project Overview

A burgeoning literature on India and China has focused on changes in the overall economy and drivers of growth. In China, a significant literature on the transformation of labour markets has emphasized, first, the transfer of surplus labour out of agriculture, and second, the transition towards more efficient allocative mechanisms particularly following the restructuring of the state sector. The growing sphere of ‘informal’ employment in urban areas has not been systematically examined.

In India, a larger body of literature has focused on informal employment, but little analysis has been undertaken on the links between this phenomenon, the nature of the labour market and the implications for growth, poverty and welfare.

From 2007-2011, in collaboration with the Institute of Development Studies (IDS), Sussex and teams of researchers in China and India, WIEGO planned a comparative research project on labour markets and informal employment, including links with poverty and other social outcomes in the two countries.

The project was established to address the gaps noted above, with a focus on the labour force rather than the economy, and on employment and welfare outcomes rather than the drivers of economic change. It sought to understand the nature of "real" labour markets through the comparative analysis of two major economies; and to explore the implications of this for poverty and growth.

Read more about the project (pdf)

Preliminary Collaboration

In February 2007, a team of 16 Chinese researchers and government officials traveled to India so the two teams could plan the project. This presented an opportunity for the Chinese team to learn what Indian activists, researchers and statisticians have done to organize, study and measure the informal workforce in India. Indian hosts included the Institute of Social Studies Trust, the National Commission for Enterprises in the Unorganized Sector, the National Council of Applied Economic Research, and the Self-Employed Women’s Association (SEWA). The 10-day visit concluded with a preliminary research design workshop in New Delhi, during which the participants agreed on the broad contours of the proposed project.

Research Design Workshop 

A research design workshop was held at Harvard University in April 2007. This was organized by WIEGO with support from Harvard’s Asia Center and Global Equity Initiative. Six members of each country team, as well as six technical advisors, met for three days to plan the research project. They were then joined by academics and practitioners from the Boston area for a two-day research seminar that featured presentations by the research teams and comments by expert discussants. The teams decided on a multi-component project that included:

  • technical consultations and pilot surveys to improve data sources and methods
  • analysis of existing and new national data
  • case studies of selected sub-sectors or occupations in which there are large concentrations of informal workers
  • documentation of good policies and practicesexchange visits between activists working with informal workers

See the report on the research design workshop.

The comparative work continued in May 2007 when two members of the India research team – N.S. Sastry, the former Director General of the National Sample Survey Organization of India, and Jeemol Unni, then Professor at the Gujarat Institute for Development Research and a consultant to the National Commission on Enterprises in the Unorganized Sector – visited China. Both individuals are well-known experts on informal economy statistics. This exchange was the first in a series of technical consultations between statisticians and researchers in China and India to improve national data sources and methods in both countries.

Funding for the first component of the project – technical consultations and pilot surveys to improve data sources and methods – was secured in mid-2009.

Both country teams then undertook city surveys in their respective countries. The Chinese team did separate surveys of local and migrant residents in six cities. The Indian team did surveys in two cities. The two country teams, and an International Advisory Committee, met in 2010 in Beijing to review preliminary findings and decide on a common tabulation and analysis plan. Joann Vanek (Director, WIEGO Statistics Programme) represented WIEGO on the International Advisory Committee and participated in the Beijing meeting. 

Technical Workshop and International Advisory Committee Meeting, CASS

Beijing, 1-2 September, 2010

Technical Workshop
Informal Employment, Poverty and Growth in India and China

Delhi, April 22-23, 2011

Final presentation made at Delhi and Udaipur - 14 December, 2011