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114 Int'l Lab. Rev. 69 (1976)
The Urban Informal Sector: Concept, Measurement and Policy

handle is hein.journals/intlr114 and id is 77 raw text is: International Labour Review, Vol. 114, No. 1, July-August 1976

The urban informal sector:
concept, measurement
and policy
S. V. SETHURAMAN'
Introduction
Since the term  informal sector  was first used in a study on Ghana 2 and
then taken up in the report of the ILO/UNDP employment mission to
Kenya 3, it has gained considerable currency in the literature on development
policy in general and employment policy in particular. Despite, or perhaps
because of, the growing interest in the subject-as evidenced by the number of
research studies undertaken in recent years-a good deal of confusion has
arisen as to what the expression really means. Not surprisingly, therefore, the
policy prescriptions differ. But it is not only the terminology itself that has
evoked criticism; in other quarters there are misgivings about the whole
approach and the usefulness of the concept in promoting employment and
economic growth.
The basic reason for the introduction of this term in the Kenya employ-
ment mission report followed from the now widely recognised fact that it takes
a very long time for the benefit of general development policies to trickle down
to the poorest sections of the population. Effective development needs to be
focused directly on a specific  target  population, and the employment
mission considered that perhaps the most important such target group in urban
areas was what it described as the informal sector. Another reason-and one
that now tends to be overlooked-for concentrating development efforts on
this sector was that besides promoting employment and more equitable income
distribution it could lead to a more efficient allocation of resources, at least in
1 International Labour Office.
2 Keith Hart: Informal income opportunities and urban employment in Ghana , in
Journal of Modern African Studies (London), Mar. 1973, pp. 61-89. An earlier version of this
article was presented to the Conference on Urban Unemployment in Africa held at the
Institute of Development Studies, University of Sussex, in September 1971.
2 ILO: Employment, incomes and equality : a strategy for increasing productive employ-
ment in Kenya (Geneva, 1972).

Copyright © International Labour Organisation 1976

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