Size estimate of the informal sector in South Africa : research article

Much debate surrounds the size, nature and characteristics of the informal sector of South Africa. This discourse tends to concentrate on a single aspect of the informal sector, namely the so-called 'second economy', consisting predominantly of small (of ten survivalist) businesses established, inter alia, at large transport interchanges and in township areas. The major focus of studies in this regard is on the characteristics and dynamics of these businesses, but such studies lack the measurement of their size and their contribution to the national economy. This study is an attempt to broaden the debate to include the unrecorded (informal) part of the modern or first economy as well as the measurement of the size of both the second economy and the informal part of the modern economy. A series of 13 previous Bureau of Market Research surveys, supplemented by secondary data, is used to estimate the size of the informal economy.