Through a Tanzanian case study, this paper challenges the claim, along with the statistics that support it, that self-employment is the dominant employment status in the informal economy. The paper begins by reviewing key insights from the relevant literature on the informal economy to argue that conventional notions of ‘wage employment’ and ‘self-employment’, while unfit for capturing the nature and variety of employment relations in developing countries, remain central to the design of surveys on the workforce therein. After putting statistics on Tanzania’s informal economy and labour force into context, the analysis reviews the type of wage employment relationships that can be found in one instance of the informal economy in urban Tanzania. The categories and terms used by workers to describe their employment situation are then contrasted with those used by the latest labour force survey in Tanzania. The paper scrutinises how key employment categories have been translated from English into Swahili, how the translation biases respondents’ answers towards the term ‘self-employment’, and how this, in turn, leads to the statistical invisibility of wage labour in the informal economy. The paper also looks at the consequences of this ‘statistical tragedy’ and at the dangers of conflating varied forms of employment, including wage labour, that differ markedly in their modes of operation and growth potential. Attention is also paid to the trade-offs faced by policymakers in designing better labour force surveys.
Since the introduction of the Skills Development Levy (SDL) in Tanzania, the financing of skills training has been contested. The private sector has raised concerns about the size of the levy and the usefulness of training provided by VET centres, and has accused the government of misallocation and misuse of the raised levy. Lack of […]
The gap between national export premium and foreign-ownership premium is stronger in manufacturing firms as opposed to service sectors. Moreover, we find clear and strong productivity premia in size, training programmes and level of development in the manufacturing firms. In the services sector, these premia are always smaller and only significant for medium-sized firms. There […]
The aim of this paper is twofold. Building on Andreoni (2018), we first aim to evaluate the current incentive structures that cause existing inefficiencies and encourage rule-breaking behaviour. Second, we seek to test empirically a number of institutional design strategies for the sector that would better align the incentives of private- and public-sector stakeholders and […]
Can Smallholders benefit from the new market opportunities from the extractive industry in Tanzania?
The recent discovery of huge oil and gas reserves in Tanzania has created a new opportunity for economic growth and development of the country. Tanzania is expected to be one of the leading producers and exporters of natural gas in the coming decade. However, 88 percent of poor Tanzanians live in rural areas and two-thirds […]