Researcher, Historical Approaches to Employment Formalization in the Asia-Pacific Region

Research on Historical Approaches to Employment Formalization in the Asia-Pacific Region

Background

Informal employment is pervasive in the developing Asia-Pacific region. In 2016, approximately 1.3 billion women and men, accounting for 68.2 per cent of total employment, were informally employed. The prevalence of informal employment varied from 50.7 per cent in East Asia to 75.2 per cent in Southeast Asia and the Pacific to 87.8 per cent in South Asia. Informal employment is typically characterized by low-paid work with a lack of security and limited access to legal or social protections.

Informal work arrangements in the region are disproportionately more common among young people aged 15-24 years in comparison to adults. In 2016, the youth-adult gap in the informal employment rate was 19.2 percentage points. While the overall share of women in informal employment (64.1 per cent) in Asia and the Pacific was lower than the share of men (70.5 per cent), the reverse was true in Southeast Asia and the Pacific and in South Asia. Moreover, informality was prevalent in all economic sectors, accounting for 94.7 per cent of agricultural employment, 68.8 per cent in industry and 54.1 per cent in the services sector.

Given the economic diversity of the Asia-Pacific region, the magnitude of informal employment varies widely from country to country, with a lower prevalence in economies with higher per capita income. In the developed economies of Asia and the Pacific, informality accounted for 21.7 per cent of total employment, compared to 71.4 per cent in the developing and emerging Asia-Pacific countries. Notably, in high-income Japan, the informal employment was less than 20 per cent. In Brunei Darussalam and Republic of Korea, the informality represented less than 32 per cent of total employment.

Among the high-income Asia-Pacific economies that have a lower concentration of labour market informality, the pathways towards formalization have been heterogeneous, taken place at different times and driven by distinct country factors and approaches. Country efforts were underpinned by a range of economic and labour market policies and institutional developments.

Reflecting the tremendous and persistent informality challenge in Asia and the Pacific and around the world, the global policy discourse has increasingly emphasized the need for a new approach that is integrated and coherent. The report on Transition from the informal to the formal economy presented at the 2014 International Labour Conference highlighted that where integrated approaches have been adopted, results towards formalization have been more robust. The report mentions that integrated approaches should give attention to a various aspects such as:

• Sustained economic growth with quality jobs;

• Improved legislation;

• Organization and representation; encouragement of equality and the fight against discrimination (in regard to women workers or migrant workers);

• Stronger institutions;

• Social dialogue promotion;

• Support for corporate initiative;

• Development of professional skills

• Extension of social protection; and

• Local economic development.

In this context, the ILO is seeking an external consultant to produce a report on Historical Approaches to Employment Formalization in the Asia-Pacific Region. The report aims to examine a set of countries that successfully managed to achieve high levels of formalization of its economy and labour market, analyse the specific policy tools, measures and approaches taken while identifying as well elements of the national context that facilitated implementation of favourable policies (governance, political setting). The report will highlight lessons learned to support knowledge exchange between countries in the region.

Objectives of the Assignment

This assignment aims to conduct research and produce a report on Historical Approaches to Employment Formalization in the Asia-Pacific Region. The report will encompass case studies of three economies, namely Japan, Republic of Korea and Singapore based on an examination of the economic policy choices and institutional developments that shaped their formalization pathways. Based on the specific country context, the analysis may draw on historical country developments during the past 50+ years.

In each country case study, the analysis should explore multifaceted and integrated factors that shaped progress in transitioning from informality to formality in the labour market and the creation of formal jobs. These may include, but are not limited to:

• Economic growth strategies to drive formal job creation

• Trade and industrial policies that facilitated structural transformation and higher productivity

• Foreign direct investment policies

• Rural development and agricultural policies

• Enterprise registration and support policies

• Enterprise taxation and incentive schemes

• Schemes aimed at inclusive finance for enterprises

• Education, training and skills development policies

• Developments in labour legislation and compliance mechanisms

• Strengthening of labour market institutions, including mechanisms for organization, representation and social dialogue

• Investments in social protection and social security systems and measures to extend coverage

• Strategies to adopt emerging technologies to facilitate formalization.

Each case study should examine the economic, political and institutional drivers that helped countries transition to low labour market informality, particularly in alignment with the ILO Recommendation 204 Concerning Transition from Informal to Formal Employment. It should present findings in a manner that highlights lesson and recommendations for other Asia-Pacific countries that are still facing high levels of informality and are pursuing efforts towards formalization and formal job creation. The report should also take into consideration issues of gender equality and inclusion.

Scope of the Work

Under the overall guidance of the Regional Economic and Social Analysis Unit (RESA) of the ILO Regional Office for Asia and the Pacific, the consultant is expected to perform the following tasks:

i. Conduct an in-depth desk review of relevant academic literature and reports related to the historical formalization initiatives and approaches in the three countries.

ii. Compile economic and labour market statistical data relevant for examining the historical transformation of the informal economy and labour markets in each country and produce a robust quantitative analysis that can support the background and qualitative research. The sources of data can encompass official sources (including national statistical offices), the ILO ILOSTAT Database, and published studies from academic and research institutions.

iii. Develop the research protocol, including interview questions and other required elements, to ensure that implementation of the research is effective, culturally appropriate, gender-sensitive, and ethical.

iv. If deemed worthwhile, identify, contact and conduct interviews with relevant stakeholders and experts in the three countries, particularly those with in-depth insights into the formalization pathways pursued and the measures to overcome challenges in that process.

v. Analyze the qualitative and quantitative data, organize and synthesize findings from the three country case studies, and draw out key lessons that can be applied to other Asia-Pacific countries.

vi. Include analysis to better understand the integrated nature of the policy and institutional developments and the extent that policy and institutional coherence facilitated the successful achievement of formalization in the three countries.

vii. Where possible, make reference to contemporary solutions (such as one-stop shops for business registration, digitization, and application of other technologies) that have contributed to the formalization process in the three countries.

viii. Produce a report in English on the findings of the research based on the suggested structure below (max. 60 pages):

a. Executive summary (3 pages)

b. Introduction (3 pages)

c. Country case studies (30-35 pages)

d. Synthesis of main findings and lessons learned (10 pages)

e. Conclusions and way forward (3 pages)

f. References

ix. Support the preparation and the presentation of the report findings in an online forum.

Methodology

The Consultant can elect to work alone or form a research team consisting of national experts to conduct separately national case studies to be consolidated into the broad report. The proposed operational modality should be identified in the expression of interest.

Deliverables

The following deliverables and timeline are expected:

1. Detailed Report Outline, describing research approach and the intended structure and content of the research report (to be delivered by 15 March 2021);

2. 1st Draft Research Report, containing the preliminary results of the quantitative and qualitative research for review and feedback from the ILO (to be delivered by 30 April 2021);

3. 2nd Draft Research Report, including revisions based on review and feedback from the ILO (to be delivered by 31 May 2021);

4. PowerPoint slide presentation (maximum 20 slides) on the research and its findings (to be delivered by 31 May 2021);

5. Active participation in an online forum and presentation of the draft report (tentatively scheduled for the early June 2021);

6. Final Draft Research Report, including final revisions based on any comments and feedback from the ILO and other stakeholder received during the online forum (to be delivered by 30 June 2021).

Assignment Period

From 1 March to 30 June 2021, reflecting 60 total working days.

Qualification & Experience Required

The consultant is expected to have the following skills and expertise:

• Advanced degree in economics, economic history, development studies, social sciences or related discipline;

• A minimum of ten (10) years of work experience with labour market research/analysis, informal economy, informal labour and related areas. Familiarity with the Asia-Pacific region is an advantage;

• Have proven knowledge of and experience in implementing research methodologies, including quantitative and qualitative data collection methods. Track record in producing regional studies and research is an advantage;

• Excellent writing and communication skills in English; and,

• Strong interpersonal skills and the ability to communicate and work well with diverse people.