Question

What is the relation between KILM 5. Employment by occupation and KILM 8. Employment in the informal economy?

Answer 1

The KILM 5 indicator provides data on jobs. More specifically, occupational information is important for the identification of changes in skill levels in the labor force. In many developed economies, occupational employment projection models are used to inform policies aiming to meet future skills needs, as well as to advise students and jobseekers on expected job prospects and this creates a difference between developed and developing economies. Changes in the occupational distribution of an economy can be used to identify and analyze stages of development. If the country is more dependent on agriculture then it will be considered as an underdeveloped country.

Moreover, the KILM 8 indicator is a measurement of employment in the informal economy as a percentage of total non-agricultural employment. To define the informal economy, it is a part of any economy that is not looked after by any form of government. The informal sector represents an important part of the economy and plays a major role in employment creation, production, and income generation. In countries with high rates of population growth or urbanization, the informal sector tends to absorb most of the expanding labor force in urban areas.

Thus one can say that occupational structure and the informal economy are related to each other. These two forms the base for any economy to grow at a fast speed.