Dynamics of the informal sector in Hanoi and Ho Chi Minh City 2007-2009: main findings of the Household Business & Informal sector survey (HB&IS)

In 2007, the General Statistics Office (GSO) launched a joint research program with the French Institute of Research for Development (IRD), to measure and analyzes the informal sector in Vietnam. Two kinds of surveys were conducted in 2007: a national Labour Force Survey (LFS), which, in a first for Vietnam, classified labour by institutional sector, separating out the informal sector; two specific surveys, in Hanoi and Ho Chi Minh City (HCMC), which were grafted onto the LFS2007 to find out more about the characteristics of Household Businesses (HBs) in general and especially the informal sector. These surveys have been extensively analyzed, and the full results edited in a book. Two years later, this successful experience has been re-conducted, with the additional objectives to consolidate the methodology and to assess the impact of the global crisis on the labour market in general and the informal economy in particular. This paper presents the main findings (both methodological and analytical) of these two rounds of surveys as regards the informal sector in Hanoi and HCMC. In the context of the global crisis, it looks at the dynamics of the informal sector between 2007 and 2009. Taking advantage of this unique survey protocol, the first part investigates the macro dynamics comparing the two representative cross sections, while the second focuses on the micro dynamics drawn from the panel component. Transitions between formal and informal sector are explored. The third part aims at analyzing the perception of HBs' heads to assess the impact of the crisis. Then, the last section explores the changes as regards the problems faced by HBs, their interaction with the state and their outlook. In the conclusion, the author determines some of the implications of the findings in terms of economic policies. This report can be usefully complemented by two companion papers: the first one presents the adjustment of the labour market and the informal economy nationwide, based on the LFS2007 & 2009; the second one is a policy brief on the impact of the crisis on the informal sector in Hanoi and HCMC.