- **MONGOLIA'S INFORMAL SEC(TOR**

Size **and** Trends

**11**

conjecture that many have simply left the labor force, leading to a precipitous decline in the labor force participation rate."<sup>8</sup> However, there is overwhelming corroborating evidence from the informal sector surveys conducted during this study, and from the household survey conducted by the SSO, that this is not the case.

23. Seven hundred and seventy informals were surveyed during the course of this study. The details of **"Unemployment" and Informal Income** the surveys will be presented later, but a certain combination of questions Percentage of households in Ulaanbaatar with informal income are pertinent for the issue of how when the household head is ... informals are reflected in official employment statistics. As reported in ... employed 44% the literature on informal sector . . . unemployed 73% employment statistics (ILO, 1993) one reason that informais are often one~~~~~~~ thtifra. ~ reso r fe Percentage of households in Ulaanbaatar with informal incomewhen the household has .. . omitted from statistics is that they do not consider themselves to be ... no unemployed people 42% "employed." Thus, a question was at least one unemployed person 54% put on each of our informal sector ... at least one unemployed person, surveys to closely mirror the and no employed people 68% employment questions asked during the annual employment census - the **Box 1** responses indicate how informals _Source:_ Author's calculations based on SSO household survey data. perceive their own employment status, and how they are reflected in official statistics as a result!<sup>9</sup> The responses provided by Ulaanbaatar's kiosks, taxicabs, boot repairmen, petty traders, and others suggest that Mongolian informals, generally, do not consider themselves to be employed, and are therefore not counted as employed in official statistics. Only 26% of taxicab drivers report to the _duureg/soum_ that they are "employed."<sup>2 0</sup> Among kciosk operators, only 16% consider themselves employed, and among the informals populating the markets and streets of the city, the numbers are generally smaller yet - on average only 13% consider themselves to be employed?' Thus, roughly 75-85% of Ulaanbaatar's informals are not reflected as employed in the official statistics.

24. The household survey of income and expenditure, conducted by the SSO, adds further support to the contention that most informals do not consider themselves to be employed, and therefore are not reflected as such in statistics?<sup>2</sup> (This household survey will be discussed in greater detail in the next section.) Although the household survey is mainly concerned with the respondents' household budget, it also includes several control variables, such as the type of organization for which the household head works, and the number of employed and unemployed people within each household. As displayed in Box 1, participation in the informal sector is correlated with perceptions of unemployment. Not surprisingly, households in which the head is "unemployed" receive 55% of their monetary income from informal sources, whereas households in which the head is employed receive an average of only 30% of income from informal sources.