This Appendix provides background information for my calculations of the size and characteristics of the informal workforce using the 1999 National Sample Survey on Employment and Unemployment (NSS) (NSSO 2001a). For a more detailed discussion of this issue, see Agarwala (2009). Perhaps the largest obstacle to work on the informal economy to date has been the lack of consensus on how to define, and thus count, informal workers. Recent studies have begun to establish definitions that are becoming consistent, at least within India.

Since the early 1970s, scholars have used a diverse range of methodologies to capture the informal workforce. When Keith Hart first coined the term “the informal sector,” there was little agreement about the concept, much less the methodology used to measure it. Almost no national-level data sets collected information on informal workers. As a result, scholars offered different, sometimes even conflicting, conclusions about the causes and effects of informal work.