The Informal Sector and The Recognition of Its Role in Inclusive Growth in Vietnam

Abstract

Household businesses are unincorporated businesses owned by individuals or families who produce or distribute goods and services for the market. The non-farm household business sector is the second major employer in Vietnam, after the agriculture sector, and also an important component of the national economy. This sector is characterized by a large proportion of informal businesses, with no business registration, and a small share of formal household businesses. The informal sector in Vietnam, therefore, is the major part of the household businesses sector. The household business and the informal sector have expanded in the last three decades and its importance would likely remain in the near future. It is a major player in the promotion of inclusive economic growth by providing jobs for a large segment of the population, by its fl exibility, by the dynamism of one of its segments, and by the large room for improvement of its productivity. Yet, it is largely left out of the Government’s policies. By collecting new data, the NOPOOR project has contributed fi ndings to this policy paper, raising the attention of the policy makers of this sector in order to achieve more productive employment and to tackle the vulnerability of its workers.  

Received 9 October 2018; published 25 March 2019