Viet Nam’s 18 million non-agricultural workers are in informal employment

The country publishes its first informal employment figures.

News | 04 October 2017
HANOI (ILO News) – More than 18 million Vietnamese are informal employment, accounting for 57 per cent of the country’s non-agricultural employment.

The findings were part of Viet Nam’s first report on informal employment launched in Hanoi on 4 October by the General Statistics Office (GSO) and the Institute for Labour Sciences and Social Studies with supports from the ILO. The data was collected from Viet Nam’s Labour Force Surveys since 2014.

Most of the non-agricultural informal employment is in production and manufacturing industries; construction; wholesale and retails, automobile and motorbike repairs.

Out of the active labour force, two age groups having the highest share of informal employment are 15-24s at the rate of 60 per cent and those aged 55-59 plus with 69 per cent in 2016.

“Viet Nam is one of the countries with the high percentage of informal employment in the Asia-Pacific region,” said ILO Viet Nam Director Chang-Hee Lee. “But facilitating transition from the informal to the formal economy is a major challenge for the world of work as half of the global labour force operate in the informal sector.”

Informal employment is defined as “employed persons who by law or in practice, hold jobs that are not protected by labour legislation, are not subject to income tax or that are not entitled to social protection and employment benefits.

According to international statistical standards, informal employment includes all informal jobs, whether carried out in formal sector enterprises, informal sector enterprises, or households. In other words, informal employment represents informal jobs in the informal sector and informal jobs outside the informal sector (meaning other economic units including the formal sector and household production).

The informal employment is often characterised by precarious and unstable employment, low incomes and long working hours no labour contracts and limited social protection benefits.

“Many low-income households and workers are in this sector,” said GSO General Director Nguyen Bich Lam.

The report indicated that 98 per cent of the informal employment are not protected by social insurance and their average wage is only two third of the level of those in the formal economy.