DefinePK

Abstract

The informal sector plays a significant role in Pakistan’s economy as well as in other developing countries. The role of the informal sector in solving the unemployment problem of Third World countries has become the focus of a conceptual and empirical debate in recent years. Most of the research takes a favourable view of this sector and suggests that it should be used as a policy instrument for the solution of the most pressing problems of developing countries, such as unemployment, poverty, income inequalities, etc. Before proceeding further, we will define the informal sector and differentiate it from the formal sector. There are various definitions, but the one given in an ILO report (1972) is generally considered the best. According to this report, informal sector activities are ways of doing things characterised by a heterogeneous array of economic activities with relative ease of entry, reliance on indigenous resources; temporary or variable structure and family ownership of enterprises, small scale of operation, labour intensive and adapted technology, skills acquired outside the formal school system, not depending on formal financial institutions for its credit needs; unregulated and unregistered units, and not observing fixed hours/days of operation. The importance of the informal sector can be gauged by its contribution to national income and employment and its contribution to financial credit as compared to that of the formal sector. According to Moirs’ study, “The contribution of informal sector to the income in Jakarta was about 30 per cent and the number of urban jobs provided by the informal sector were estimated to be between one quarter and two-thirds” {Hemmer and Mannel (1999)}. The share of the informal credit to total rural credit in many developing countries was estimated to be from 30 per cent to more than 80 per cent [Germidis, (1990)}. The informal sector plays a vital role in Pakistan. The share of the informal sector in the urban employment of Pakistan was estimated to be about 69 per cent for the year 1972-73 by Guisinger and Irfan (1980). The World Bank (1989) also estimated the employment share of the informal sector in urban Punjab to be 78 per cent in 1984-85. Ahmad (1989) calculated the share of the informal sector in the total employment of Pakistan as 74.48 per cent for the year 1984-85. Despite the significance of the informal sector in Pakistan, there is limited attention paid to and research done in this sector and especially in the rural informal sector. Although women’s role in the rural informal sector is very significant, it has been completely ignored. There is hardly any research on working women in the rural informal sector of the country. The object of this paper is to analyse the role and contribution of the female labour force in the rural informal sector of Punjab and to highlight the problems of working women in this sector in the light of the survey results. The layout of the study is as follows: literature review is given in section II. Section III is a description of the survey. Survey results are discussed in section IV and finally policy implications and conclusions are given in section V.