INTRODUCTION

Employment coverage in the informal sector refers to household members aged 15 to 64 years working at least one hour a week as employers, employees,
own-account workers and unpaid family workers. The informal sector's main criteria include having fewer than ten employees and not being registered under specific forms of national legislation. This report provides statistics according to demographic and socioeconomic characteristics, namely gender, age group, stratum, state, educational attainment, employment status, employment category and industry. According to the Measuring Informality Manual: A Statistical Manual on the Informal Sector and Informal Employment by the International Labour Organization (ILO), agricultural related activities are excluded from the coverage of the Informal Sector Survey. Nevertheless, recognizing the needs and importance of comprehensive statistics on employment in the informal sector, the Informal Sector Survey has collected informal employment data including the Agriculture sector in Malaysia starting in 2021.

Meanwhile, a worker in informal employment refers to any workers who does not have access to at least one social security scheme or employment benefit. The social security schemes and employment benefits refer to: pension fund; basic health insurance; injury insurance; disability benefits; survivors’ benefits; paid annual leave; paid sick leave; paid maternity leave; and unemployment insurance. Based on the International Conference of Labour Statisticians (ICLS) guidelines, informal employment is defined as the total number of informal jobs, whether carried out in formal sector enterprises, informal sector enterprises or households.

INFORMAL EMPLOYMENT

In 2021, the total number of informal employment including agriculture was 3.50 million persons with a share of 57.0 per cent (2.0 million persons) in informal sector, followed by formal sector at 42.0 per cent (1.50 million persons) and household with 1.0 per cent (35.2 thousand persons). Furthermore, the number of informal employments for non-agriculture which included in formal and informal sector as well as household were 2.70 million persons.  During the year, informal employment was concentrated in the formal sector (50.9%) with 1.38 million persons and followed by the informal sector (47.8%) with 1.30 million persons. Exhibit 1

Additionally, from the distribution of informal employment including agriculture by sex, male was the highest composition with 61.0 per cent recorded 2.13 million persons and followed by female with 39.0 per cent to record 1.37 million persons in 2021. For non-agricultural, male still dominated with 55.3 per cent at 1.51 million persons and followed by female with 44.7 per cent to record 1.22 million persons. Besides, informal employment in urban areas had the highest composition (67.0%; 2.35 million persons) as compared to rural areas (33.0%; 1.15 million persons). In non-agriculture sector, urban areas was also had the highest composition of informal employment at 77.9 per cent or equivalent to 2.12 million persons, while rural areas recorded 22.1 per cent at 0.60 million persons.

EMPLOYMENT IN THE INFORMAL SECTOR

In term of employment in the informal sector for non-agriculture rebounded by 1.8 per cent to 1.30 million persons in 2021, after registering a negative growth in 2017 (-0.6%; 1.39 million persons) and 2019 (-4.8%; 1.26 million persons). On the same notes, both male and female workers in the informal sector went up by 1.2 per cent to 724.8 thousand persons (2019: 707.2 thousand persons) and 2.6 per cent to 578.0 thousand persons (2019: 548.9 thousand persons) respectively, as compared to 2019. On the other hand, males contributed the most to employment in the informal sector, including agriculture with 64.4 per cent or the equivalent of 1,285.4 thousand persons and female comprised 35.6 per cent (711.5 thousand persons) in 2021. Chart 1

Chart 1: Number and share of informal sector employment in the labour market, Malaysia, 2010 - 2021

The majority of employment in the informal sector operates at home (37.1%), followed by markets/ street stalls (29.2%), no fixed location (mobile) with 20.7 per cent, and factory/ office/ workshop (13.0%). Looking at the employment by stratum, both urban and rural areas registered an increase in the employment in informal sector in 2021. Urban areas recorded a marginal increase of 0.8 per cent to 959.9 thousand persons (2019: 944.7 thousand persons). In the meantime, employment in the informal sector in rural areas posted an addition of 4.9 per cent to 342.9 thousand persons (2019: 311.5 thousand persons). Chart 2

Chart 2: Employment in the infromal sector by type of work place, Malaysia, 2019 and 2021

The full publication of the Labour Force Report, October 2022 can be downloaded through eStatistik Portal.

Released By:

DEPARTMENT OF STATISTICS MALAYSIA

30 December 2022

Contact person:

Baharudin Mohamad 
Public Relation Officer
Strategic Communication and International Division
Department of Statistics, Malaysia
Tel : +603-8885 7942
Fax : +603-8888 9248
Email : baharudin@dosm.gov.my