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
* The authors are Professor and Lecturer in the Department of Economics, Bahauddin
Zakariya University, Multan, respectively.
The Lahore Journal of Economics, Vol.4, No.2
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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.