Statistics, Development and Human Rights
The informal or underground economy is often the first place to look, and indeed, there is a large and expanding informal sector in the Jamaican economy. The practice of occupational multiplicity as a method of economic survival and advancement has had a long history in Jamaica. The level of reporting the earnings from second and third sources – many of which are in any event highly variable – has been normally very low, and has been one of the many reasons for the decision to focus on consumption expenditure indices.
Jamaica has traditionally also had a large small farm sector which, as recently as 1999 accounted for about a third of the employed labour force. Since the early 1970s however, the growth of self-employment or own account activities has been both rapid and substantial – rising from 14% of the labour force in 1970 to 29% in 1997 [Labour Force Surveys – Jamaica]. The expansion of this sector over the 1989-97 period is shown in Table 2.
Table 2 – growth of the informal sector, and of remittances
Own account workersa
Net Remittances (US$m.)
Expressed as a percentage of the labour force
Sources:Labour Force surveys of Jamaica: Statistical Institute of Jamaica, 1989-1997
IMF Balance of Payments Yearbook, 1998
It will be seen that this group now accounts for some 29% of the labour force -having peaked at 33% in 1991. This growth was largely in response to the declining economy and the associated contraction of the formal wage and salaried sectors. There are also important differences between the older small farm sector that was formally linked into the market and large estate economies, and the newer economic activities. Today, most of the activities are in the informal sector, and tend to be concentrated in the petty trading and distributive sectors; many have a very transient character, and attrition rates are extremely high. It has also been estimated that a fairly significant number of these activities are illegal or at least border on illegality [Witter and Kirton, 1990; McBain et al 1994; Le Franc and MacFarlane Gregory 1985; Klein and Tokman, 1993]. The difficulties of tracking and measuring the activities of the informal sector have long been recognised [Hart 1989]. These more recent developments have therefore only compounded the earlier problems of measurement. The real extent and value of the activities carried out in this sector tend not to be captured by the official data collection processes. It may then be that the anomalous relationships being observed are due to the unrecorded benefits being gained from this growing informal sector.
Notwithstanding the growth of this sector all evidence suggest that the value- added, and the impacts on incomes and production are all quite small. The large majority of the activities or enterprises are extremely small one-man operations, attrition rates are very high, and revenue levels are very low [Witter and Kirton 1990; McBain et al 1994]. At the same time, the sector has actually been contracting – falling from 33% in 1991 to 29% in 1997 [See Table 2]. This is an interesting development, as this is the same period over which the proportion falling below the poverty line also declined. The informal sector therefore seems to be an unlikely source of the significant increases in the consumption levels. The bivariate regression of the poverty ratio on a measure of
Montreux, 4. – 8. 9. 2000