Towards a better measurement of the informal sector in Tunisia
The informal sector—often referred to as the "hidden economy"—plays a significant role in Tunisia's labor market and economy. However, due to the lack of official definitions and consistent methodologies, its actual size and impact have long remained elusive. A recent paper authored by Mohamed Hammami, Yamen Helel, and Constance Torelli offers a groundbreaking analysis of the informal sector in Tunisia, unveiling critical findings and innovative approaches that promise to reshape our understanding of this vital economic component.
"In Tunisia, the informal sector has often been a gray area in economic analysis, riddled with estimations rather than accurate measurements."
This statement from the paper encapsulates the core challenge: a lack of official data has led to conflicting figures, with estimates of the informal sector’s share of GDP ranging from 30% to 45%. Until recently, Tunisia lacked an operational definition of the informal sector, which only added to the confusion.
A New Approach to Unmask the Informal Economy
The authors highlight how Tunisia's National Statistical Institute (INS) tackled this issue by introducing a methodology that combines international best practices with local adaptations. The paper emphasizes the adoption of the ILO's broad definition of informal employment and the integration of the 1-2-3 survey methodology, a framework praised for its proven reliability across continents.
Redefining the Sector: The paper defines the informal sector as "economic units lacking complete accounting systems, irrespective of their legal status or activity type".
Enhanced Surveys: INS revised the employment survey in 2017, adding targeted questions to identify informal production units. This adjustment marked a pivotal shift in collecting data tailored to Tunisia's economic landscape.
What the Numbers Reveal:
The findings are eye-opening. In 2016, the informal sector accounted for 455,600 enterprises employing 718,250 individuals, representing a quarter of the total non-agricultural employment in Tunisia. This workforce is predominantly engaged in:
Commerce (39%)
Services (44%)
But the report doesn't stop there. It reveals that 84% of these units lacked formal accounting systems, while 48% were unregistered with tax authorities, indicating the vast scope of economic activities operating beyond regulatory oversight.
The Faces Behind the Informal Economy
The paper also delves into the human aspect of the informal economy. Most workers in this sector are self-employed or micro-entrepreneurs. For many, these jobs are not just income sources—they are survival strategies. However, their lack of formal registration denies them access to essential benefits like social security and financial services.
Why This Matters: Beyond Numbers
The informal sector is not just an economic issue—it is a social and policy challenge. The paper highlights how better understanding and integrating the informal economy into Tunisia's national accounts can:
Provide more accurate economic indicators for policymakers.
Support efforts to transition informal workers to formal employment, boosting their rights and economic security.
Enable targeted interventions to reduce unemployment, which has long plagued Tunisia, especially among its youth.
"Measuring the informal sector is not just about numbers—it's about crafting policies that resonate with reality."
This expressive insight underscores the importance of this work. As the authors suggest, future surveys will not only track trends in informality but also guide strategies to formalize informal enterprises without stifling their growth.
Looking Ahead: Building on Success
The authors call for further steps to refine and sustain these advancements:
1. Expanding Surveys: Including unregistered units in micro-enterprise surveys to provide a holistic view.
2. Strengthening Collaboration: Expanding the dialogue between national accountants and statisticians to align methods and definitions.
3. Developing Analytical Tools: Creating matrices to integrate employment and production data for a clearer picture of the informal sector's contribution to GDP.
Final Thoughts: Why It Matters
Tunisia’s journey toward a better measurement of its informal sector offers valuable lessons for other nations struggling with similar challenges. The work of Hammami, Helel, and Torelli is not just a technical achievement; it’s a warning light for policymakers, economists, and social reformers striving to bring clarity and fairness to a critical part of the economy.
"This is not just about measuring informality. It’s about making the invisible, visible—and giving it a voice."
This call to action reminds us that data is not just about numbers; it’s about understanding people, their work, and their contributions to society.
Learn More: Access the Full Study
For a deeper dive into the methods, findings, and implications of this study, you can read the full paper here: "Towards a Better Measurement of the Informal Sector in Tunisia".
About the Authors
Mohamed Hammami: Director of the National Business Directory at Statistics Tunisia
Yamen Helel: Director of Employment Statistics at Statistics Tunisia
Constance Torelli: Program Officer for Cooperation at INSEE
This article is based on their pioneering work published in Statéco n°113, 2019.