The Characteristics of Informal Sector.
The concept of "informal sector" was firstly introduced by the International Labor Organization (ILO) in 1973, in its official report of its comprehensive employment mission in Kenya. However, the concept itself, until now, is still in debate. The most difficult thing in the debate is to make an agreement in setting definite boundaries between the informal sector and the formal sector (Dijk, 1998, 179; Whyte, 1991, 34). There are many different perceptions and definitions in determine the scope and, even, the characteristics of the informal sector. This discussion does not focus on the debate, but it rather aims to accomplish a general overview of the informal sector as a basis of this project analysis.
However, it is interested to refer the characteristics of the informal sector given by Michelle Hansenne, the Director-General of ILO in his speech-report (ILO, 1991, 4), as follows:.
1. It is a very small-scale unit producing and distributing goods and services. The measurement limit of a small-scale is different from one's opinion to others. It can be the small scale on its place, capital, number of labor, or others. .
2. It consists largely of independent, self-employed producing in mostly urban areas in developing countries. Some, such as Dijk (1998, 179), call this characteristic as an unorganized small business. .
3. Many of them employ family labor and/or a few hired workers or apprentices. Some state, such as in Hansenne (1991, 7), Bozzoli (1991, 15) and Whyte (1991, 35), that women of the family has an important role in the their informal sector activities. .
4. It operates with very little capital or none at all. However, the limit of the capital is not clear, as a country to others has its own economic condition.
5. It utilizes a low and irregular incomes and highly unstable employment. .
The sector could be called as "informal" as it is, of course, out of the formal sector characteristics.
