EMPLOYMENT PROFILES FOR KENYA,

1994-96

by

John Thinguri Mukui

(Consultant)

Background Report Prepared for the Seventh National Development Plan,

1994-96, Office of the Vice President and Ministry of Planning and National
Development, Nairobi, Kenya
NOVEMBER 1993

EMPLOYMENT PROFILES FOR KENYA, 1994-96

TABLE OF CONTENTS
1

INTRODUCTION .......................................................................................................................... 1

REGULAR EMPLOYMENT DATA FROM CBS .......................................................................... 2

CONCEPTS AND DEFINITIONS USED IN REGULAR ESTABLISHMENT-BASED SURVEYS ................. 2
ANNUAL ENUMERATION OF EMPLOYEES AND SELF-EMPLOYED PERSONS .................................... 4
SURVEY OF DOMESTIC SERVANTS ............................................................................................................. 7
SURVEY OF URBAN INFORMAL SECTOR ................................................................................................... 9
SURVEY OF INDUSTRIAL PRODUCTION.................................................................................................. 12

EMPLOYMENT DATA FROM AD HOC CBS SURVEYS ........................................................ 13

RURAL NONFARM ENTERPRISES SECTOR .............................................................................................. 14
SURVEY OF RURAL NON-AGRICULTURAL ENTERPRISES, 1985 ......................................................... 15
THE NATIONAL MANPOWER SURVEY, 1986-1988 ................................................................................. 15
LABOUR FORCE SURVEYS........................................................................................................................... 18
EMPLOYMENT IN SMALL FARM SECTOR ................................................................................................ 25

EMPLOYMENT DATA FROM OTHER AGENCIES ................................................................ 26

MINISTRY OF LABOUR AND MANPOWER DEVELOPMENT ................................................................ 26
REGISTRAR GENERALS OFFICE ................................................................................................................ 27
NATIONAL SOCIAL SECURITY FUND ....................................................................................................... 28

DELAYS IN RELEASING LABOUR STATISTICS ..................................................................... 29

SOME ILLUSTRATIONS OF USES OF LABOUR DATA ......................................................... 30

COMPUTING LABOUR COMPONENT OF GDP ........................................................................................ 30
DISTRIBUTION OF WAGES: AN ILLUSTRATION ..................................................................................... 31

EMPLOYMENT PROFILES, 1990-96......................................................................................... 35

SUMMARY AND CONCLUSION .............................................................................................. 42

TERMS OF REFERENCE .................................................................................................................... 44

STATISTICAL ANNEX........................................................................................................................ 47

EMPLOYMENT PROFILES FOR KENYA, 1994-961

1

INTRODUCTION

1.
The purpose of the paper is twofold. First is to evaluate the scope and quality of labour
statistics generated by Government ministries and agencies. The analysis covers the modern sector,
small farms, rural nonfarm and the urban informal sector. While employment and earnings data for
the modern sector are collected through the annual census of establishments and Government
nominal rolls, data for the other sectors are derived using very restrictive assumptions; or residually
from the knowledge of composition and magnitude of the labour force. This creates special problems
in that errors of measurement and labour force summary statistics (e.g. unemployment rates) affect the
magnitude of estimates for the sectors whose employment is derived residually. Secondly, review of
the labour statistics offers a basis for constructing employment profiles and projections for the period
1994-96. The employment profiles will be used as an input to the seventh National Development Plan
1994-96. The Kenya government has traditionally created employment profiles for the entire
population as an input to development planning process beginning with the 1979-83 Development
Plan.
2.
The Central Bureau of Statistics (CBS) is the Government department responsible for
collection, processing, analyzing, and disseminating statistics in Kenya. Among data collection
activities, CBS collects employment and earnings data on an annual basis through establishment-based
postal surveys, and on ad hoc basis through household-based personal interviews.
3.

CBS collects data on employment and earnings through the following regular surveys:
i
ii
iii
iv

Annual Enumeration of Employees and Self-Employed Persons;

Survey of Urban Informal Sector;
Survey of Domestic Servants; and
Annual sectoral surveys, e.g. Survey of Industrial Production, Business Expectation Enquiry,
Transport Statistics, Hotel Statistics, etc.

4.
There are ad hoc surveys that generate employment and earnings data, among other variables
the surveys are designed to monitor. Such surveys are carried out solely by CBS or by CBS in
conjunction with other ministries. The surveys include population censuses, household budget
surveys, labour force surveys and manpower surveys. The most regular and important source of
employment and earnings data in the modern sector is the Annual Enumeration of Employees and
Self-employed Persons.
5.
There are other Government and nongovernmental institutions involved with collection or
culling of employment and earnings data. Among them are the line ministries such the ministries of
Labour and Education. The Registrar of Companies, a unit within Attorney Generals Chambers, keeps
files for all registered companies. Information contained in the files is used to update the frame CBS
uses for collecting employment data through establishment-based surveys. Other institutions
compiling data on employment and earnings include the Federation of Kenya Employers (FKE), the

Some of the material is drawn from my paper titled Kenya: The Coverage of Official Labour Statistics,
Background report prepared for the Presidential Committee on Employment, Nairobi, Kenya, 13 December
1990.

Central Organization of Trade Unions (COTU), educational institutions, and researchers.

International institutions such as the International Labour Organization (ILO) and the World Bank
also cull employment and earnings data from primary sources in compiling country profiles.
6.
The paper is divided into six parts. Sections 2 and 3 are a rundown on the regular and
occasional censuses and surveys conducted by CBS to gather labour data. Section 4 focuses on other
official institutions engaged in collection and analysis of labour data, while Section 5 briefly discusses
delays in official release of labour statistics. The definitions used by CBS in classifying official labour
data (based on persons by main economic activity) are differentiated from those of labour force
surveys (based on allocation of time per economic activity). Section 6 deals with the various uses of
labour data, narrowing down to issues of size distribution of wage earnings and the compilation of
labour costs component of Gross Domestic Product (GDP). Section 7 presents employment profiles for
the entire population using labour data and population/labour force projections.

REGULAR EMPLOYMENT DATA FROM CBS

CONCEPTS AND DEFINITIONS USED IN REGULAR ESTABLISHMENT-BASED SURVEYS

Modern Sector
7.
The modern sector is defined to include all establishments in urban areas, large scale farms and
other modern enterprises located in rural areas plus that part of the public sector which is engaged in
activities of an enterprise nature. In this context, the agricultural establishments covered by the
Labour Enumeration (LE) survey are only those located in the former scheduled areas2, and exclude
the very large number of small holdings outside the former scheduled areas. Other very small
non-agricultural rural-based establishments are also excluded.
Economic Activity
8.
The term economic activity as defined by the United Nations System of National Accounts
(SNA) covers those activities that produce goods and services that fall within the SNA production
boundary. The CBS classification closely follows this definition. However, modifications are made to
fit Kenyas economic structure, mainly at the group level (see Kenya Statistical Digest, Volume XVI,
No. 1, March 1978). The economic activities used in analyzing employment and earnings data
collected by CBS follow the following hierarchy:
1.
2.
3.
4.

Major division
Division
Major Group
Group

There are ten Major Divisions:

1.

Agriculture, Hunting, Forestry and Fishing

In the colonial period, Scheduled Areas was land alienated to exclusively European settlement, which is largely
coterminous with the white Highlands but since independence is referred to as Large Farm Areas.
Nonscheduled Areas was land reserved for African settlement, and is referred to as Small Farm Areas. About 7.4
million acres of land were reserved for the exclusive use of Europeans, with about 3.5 million acres in mixed
farming areas and 3.9 million acres used mostly for plantations producing coffee, tea or sisal, or for ranching.

2.
3.
4.
5.
6.
7.
8.
9.
10.

Mining and Quarrying

Manufacturing
Electricity and Water
Construction
Wholesale and Retail trade, Restaurants and Hotels
Transport and Communications
Finance, Insurance, Real estate and Business Services
Community and Social Services
Activities not adequately defined

Establishment
9.
To determine the economic activity of an employed person, we must refer to the activity of
the unit in which the person works. The unit is the establishment, and in the framework of the United
Nations International Standard Industrial Classification of economic activities (ISIC), is defined as the
smallest statistical unit. An establishment is an entity which exclusively or principally carries out a
single type of economic activity at a single physical location. In the case of commercial banks, an
establishment would be a branch at a specific location, say, Kenya Commercial Bank, Tom Mboya
Street. Likewise in the hotel industry, a chain of hotels with different locations and names, but under
the same management, would be considered as separate establishments. This should also apply to
farms and estates. There are, however, some complications in this definition because some units are
hard to locate physically due to the nature of their activities. Thus, construction workers such as
masons may carry out daily activities at different worksites which are far away from each other, while
self-employed taxi drivers have boundless worksites.
Firm or Enterprise
10.
Since industrial classification is based on homogeneity of activities carried out by the
economic unit, it is important to distinguish enterprises from establishments. The enterprise,
according to ISIC, is the smallest legal entity (or group of legal entities) which encompasses and
directly or indirectly manages all of the functions necessary to carry out the economic activities of the
establishments. The enterprise therefore does not represent unit of physical location nor necessarily of
kind of activity. For illustrative purposes, Kenya Breweries Ltd is a firm with different establishments:
one producing glass for bottles, and another distilling and bottling the drink itself, etc.
Occupation
11.
Occupation refers to the type of work (duties) one was performing during the reference
period, regardless of the economic activity in which one may be employed or type of training
received. The main groupings are:
011 013 014 015 016 017 018 021 023 024 025 -

Architects, engineers and surveyors

Draughtsmen and engineering technicians
Doctors, dentists, pharmacists and veterinarians
Nurses and other paramedical staff
Chemists, physicists, biologists, zoologists and agronomists
Technicians in physical science and life sciences
Statisticians, mathematicians, systems analysts and economists
Statistical officers, mathematical technicians and related technicians
Aircraft and ship officers
Lawyers and jurists
Teachers and lecturers with university degrees

026 027 030 041 042 043 050 061 062 063 -

064 065 066 067 071 072 073 075 081 082 083 099 -

Other teachers
Librarians, sociologists, journalists, curators and related scientists
Ministers of religion and other social and cultural workers
General managers and salaried directors
Middle level executives and departmental heads
Qualified accountants and auditors
Accounts assistants, cashiers, bank tellers, bookkeepers and bank clerks
Other professionally-qualified personnel not elsewhere covered
Production supervisors and general foremen
Skilled workers: (a)
Miners, metal processors, paper makers, chemical processors, tanners, food and
beverage processors, tobacco preparers, tailors and shoemakers
Skilled workers: (b)
Blacksmiths, mechanics, electrical fitters, plumbers and sound equipment operators
Skilled workers: (c)
Printers, bookbinders and photo engravers
Skilled workers: (d)
Bricklayers, carpenters, painters and other construction trades
Drivers of transport, material handling and earthmoving equipment
General clerks, typists and office machine operators
Secretaries and stenographers
Other skilled workers in retail and wholesale establishments
Security personnel, caretakers, messengers, waiters, bartenders, cooks, firemen, launderers
and hairdressers
Loggers, fishermen and hunters
Semi-skilled workers
Unskilled workers and other labourers
Casual employees

ANNUAL ENUMERATION OF EMPLOYEES AND SELF-EMPLOYED PERSONS

Survey Description and Organization
12.
The Annual Enumeration of Employees and Self-Employed Persons, commonly known as the
Labour Enumeration (LE) survey, is an annual mail survey that covers all registered establishments in
the modern sector. The survey chiefly collects earnings and employment data. These statistics are
collected under the Statistics Act (Cap 112 of the Laws of Kenya), specifically under The Statistics
(Employment) Regulations gazetted each year. Statistics on number and size of establishments are
reported in the annual Statistical Abstract showing (a) number of establishments by employment
groups (0 employees, 1-4, 5-9, 10-19, 20-49 and 50+), (b) total number of employees by employment
groups, and (c) number of establishments/businesses opening and closing.
Coverage
13.
The survey covers about 26,000 establishments in the modern sector of the economy,
excluding central Government and educational institutions under the Teachers Service Commission
(TSC). These establishments are grouped into two classes by size of employment. The first category,
referred to as Large Scale, comprises about 4,500 establishments which employ 20 or more persons.
The second, known as Small Scale, covers about 21,500 establishments employing less than 20 persons.
For the first category, a detailed questionnaire (FORM LE/9-/L) is administered to the respondents,
while the latter uses a brief schedule labelled FORM LE/9-/S. In addition, Government departments

are mailed Form LE/9-/C to capture information on casual employees as they are not included in the
payroll.
Survey Frame
14.
The basis of data collection for any establishment-based surveys in CBS is the Master File
(MF). Therefore, the LE survey uses the MF to mail questionnaires to establishments. The MF is a
register of firms in the modern sector of the economy. The MF takes the establishment rather than the
firm as the unit of the register.
15.
The main sources of MF units are administrative records. The names of newly registered
establishments are obtained from the Registrar Generals office in the Attorney Generals Chambers.
Other important sources used in updating the MF include:
i
ii
iii
iv
v
vi

The register maintained by National Social Security Fund (NSSF);

The register maintained by the Ministry of Industry;
Commissioner of Insurance, Central Bank of Kenya, and professional/business organizations
such as the Kenya Association of Manufacturers;
Physical listing of new establishments by district-based CBS officers, when such
establishments are not contained in the district-specific checklists supplied to the districts;
Physical listing of new establishments by headquarters staff during listing exercise (rarely
carried out due to financial constraints); and
The media, i.e. the Business Directory, the Telephone Directory, newspapers, magazines,
periodicals, etc.

16.
The lists are counterchecked with the active MF to avoid any duplication or omission of a
record. Feedbacks from filled returns, field follow-ups by district and headquarters personnel, and
other CBS establishment-based surveys are used to update the MF by monitoring the closure of an
establishment, or changes in name, ownership, activity, status or geographical location.
17.
With respect to the establishments of the Central Government and Teachers Service
Commission, data are obtained from their respective nominal rolls pertaining to 30th June of every
year. These are therefore the most reliable datasets on public employment and earnings. In addition,
the Government hires works-paid casual employees for specific short-term projects undertaken
mostly by the following Ministries: Water Development, Public Works, Transport and
Communications, Environment and Natural Resources, and Agriculture. Data pertaining to such
employees are gathered through the Survey of Government Casuals as they are not included in the
payroll.
Data Processing
18.
The LE survey information is analyzed in the mainframe computer at the Government
Computer Services (GCS). The receipt of the survey forms is monitored through a specifically designed
checklist, where each responding establishment is ticked off against its name, and the date the
establishments questionnaire is received entered into the appropriate column. The returns are edited
and taken to the keying room as they are received from the responding establishments. After closing
the survey in the month of March of each year, hard copies from the tapes containing the data are
availed to the Labour Statistics Section to proofread or validate. After validation (cleaning tapes),
required tabulations are generated by taking the following steps:

i
ii

iii
iv

Data collected by the three survey forms (i.e. FORM LE/9-/L, FORM LE/9-/S and FORM
LE/9-/C) are merged to form the Primary Survey File;
The primary survey file is enriched with the Estimation file (a file that contains computer
generated employment and earnings estimates for establishments that would not have
responded by the close of the survey) to form the Enriched Survey File;
The enriched survey file is merged with two magnetic tapes containing information on civil
servants and teachers employed by the TSC to form the Final Employment File;
Thirteen Standard Tables are then produced by the mainframe computer and given to the
Labour Statistics Section. The Labour Statistics Section uses these tables to update employment
and earnings series appearing in various publications of the CBS. The same tables are also used
in meeting data requests from different users.

Classification and Analysis

19.
Employment and earnings data compiled from the LE survey are presented in the following
CBS publications: (a) the Economic Survey - 12 Tables, (b) the Statistical Abstract - 25 Tables, and (c)
Employment and Earnings in the Modern Sector - 29 Tables. Geographical, activity, and occupational
codes are assigned to the Master File to facilitate analysis of employment data by area, industry and
occupation. For instance, urban versus rural analysis can be carried out with ease; for data are available
by sub-location, which can be aggregated to location, division and district levels. Furthermore, all
urban towns, defined as urban centres with a population of 2,000 or more persons, are given codes in
the Master File. Therefore, to get urban employment, one needs to sum up employment in all urban
centres in the country. Likewise, employment data are presented on a classification based on the 1968
edition of the United Nations International Standard Industrial Classification of economic activities
(ISIC) at four-digit level.
Limitations
20.
One of the weaknesses of this survey has been the low response rate. Response rate for
small-scale establishments averages about 28 percent, while that for large-scale establishments is
around 58 percent on average. The rates for the latter are higher because of follow-up work, which is
targeted at establishments employing 20 or more persons. The low response rates lead to
understatement of employment figures. In an endeavour to improve response rate, thereby reducing
estimation, follow-up of non-responding firms is done two months from the date of posting the
questionnaire to the establishment. However, due to budgetary constraints, follow-up concentrates
only on the large firms.
21.
Data manipulation includes estimation for non-responding establishments. Although an
estimation method for non-responding establishments is activated by the computer at the analysis
stage, the method collapses where an establishment fails to respond for three or more consecutive
years. If an establishment fails to respond in the first year, estimates are made on the assumptions that
its employment has not changed and that earnings followed the general trend of the responding firms.
For those establishments which did not respond in the two previous years, estimates are derived on
the assumption that employment followed a similar pattern as that of establishments of the same size
in the same economic activity which had responded for three consecutive years 3. The automatic
For an establishment falling under activity j that responds in year n but defaults in years n+1 and n+2, the
computer carries forward the figures (x) for year n and uses the growth rate for the establishments in activity j
which responded for year n+1 to get employment figure for year n+1 as (x+e). For year n+2, the figure (x+e) for
the defaulting establishment is subjected to the growth rate of total employment in the responding
establishments falling under activity j.
3

adjustments done by the computer are then manually scrutinized on a firm-by-firm basis to determine
whether the estimates are reasonable. If an establishment does not respond for three years in a row, it
is assumed to have gone out of business and is therefore removed from the Master File.
22.

To improve on the response rates, the following measures are recommended:

i

ii

Use of CBS field infrastructure, i.e. District Statistical Officers (DSO) and district-based
enumerators in the establishment-based surveys, and especially during the follow-up phase of
the surveys should be encouraged;
The LE survey could be carried out on a sample basis. Before such a decision is taken, a
complete listing of establishments should be carried out, estimation procedures formulated,
and appropriate computer programs compiled.

23.
The other main constraint to the LE survey has been defects in the Master File. The Master
File is known to contain establishments that have closed down, and some that are dormant. It is also
known to omit establishments that are known to exist. It has proved difficult for the headquarters staff
to identify these establishments and to carry out the necessary corrections. The LE Section does not
have adequate personnel and funds to investigate these cases adequately.
24.
It is against this background that there is a feeling that the Master File should have at least
70,000 establishments as opposed to the 45,000 establishments it currently lists. This figure can be
derived by:
i

ii

Projecting the number of establishments from way back in 1980, by use of annual registration
of companies - as given in Table 70 of the Statistical Abstract; and growth rates of the economy
by sectors since then;
Using the records held with the NSSF, which give the number of employers registered with
the Fund at 39,000. Although employers are legally required to register with the Fund if they
employ 5 or more persons, many employers evade registration with the Fund for varied
reasons; and employers are registered at firm/enterprise level, implying that some of the
39,000 firms may be made up of more than one establishment.

25.
Understating the number of establishments in the Master File has serious implication on the
reliability of data emanating from any establishment-based surveys. In particular, employment data
are seriously understated mainly due to defects in the Master File. Labour force and unemployment
projections carried out by the Long Range Planning Unit of the Ministry of Planning and National
Development give current employment estimates which are far above the total employment figures
given in the 1993 edition of the Economic Survey.
26.
A Census of Establishments to update the current Master File is therefore highly
recommended. In the meantime, other sources should be fully utilized in complementing the LE
survey so as to come up with realistic employment figures. In this regard, NSSF data files should be
scanned for employment figures (current contributors). Employment data from household-based
surveys and censuses should be utilized as benchmark data, which should be updated by LE and other
establishment-based regular surveys.
SURVEY OF DOMESTIC SERVANTS
27.

Domestic servants are defined as people who perform household chores and include ayahs,

cooks and maids. Data on employment of domestic servants used to be collected by the LE section
through a mail annual survey called Enumeration of Domestic Servants. A list of respondents was
compiled using the prevailing edition of the Kenya Post Office Telephone Directory. The survey
covered about 43,686 persons with private postal addresses. These persons were mailed Form
LE/19../D, and requested to give the number of domestic employees and monthly salaries/earnings for
the employees. Results of the survey were analyzed to give estimates of domestic servants and the
average earnings. The information was used to update CBS publications, e.g. Table 4.6 in the 1984
Economic Survey and Table 213 in the 1983 Statistical Abstract.
28.
However, since its inception in the early 1970s, the survey persistently suffered from a serious
response problem to the extent that the effective returns for 1981, 1982 and 1983 were 4.8 percent,
17.7 percent and 13.5 percent of the total questionnaires dispatched, respectively. The most serious
cause for the low response rate was the survey frame. First, the use of Post Office Directory frame was
based on the wrong assumption that only those people operating a Post Office box employ domestic
servants; and that every person whose name appears in the Post Office Directory employs domestic
servants. Numerous people who employ domestic servants were therefore excluded from the frame.
Also included in the frame were a lot of people who were not employing domestic servants. Secondly,
the frame offered no possibilities for physical follow-ups, i.e. there were no quick ways of visiting the
respondents, nor were there means of identifying employers of domestic servants, if such employers
are not listed in the Post Office Directory.
29.
Consequently, and mainly due to low response rate, possibilities of using other frames started
being explored. In 1982, a question on domestic servants was incorporated in the 1982 Rent Survey.
The analysis on this question showed that, although the figures on employment of domestic servants
were low, response rates were higher compared to response in the Survey of Domestic Servants.
However, it was not until 1987 when the old frame of Postal Telephone Directory was abandoned, and
the National Sample Survey and Evaluation Programme (NASSEP) frame was adopted as the most
appropriate frame for collecting data on employment of domestic servants. In this regard, the Rent
Survey questionnaire was modified to incorporate both Rent Survey and Enumeration of Domestic
Servants. The Rent Survey became the Survey of Rent and Domestic Servants.
30.
Data from the new survey started being used in 1988. However, the results have been giving
low figures due to the following reasons:
i

ii

The observation unit of the frame for Rent Survey is the residential structure, while there may
be no discernible relationship between a structure and domestic servant. For instance, a
structure may be occupied by people who do not require hired domestic help, such as single or
unmarried persons.
The rent survey frame is biased towards low income residential areas, for like any other
NASSEP frame, it is determined by the population size. The frame does not therefore
adequately represent high income groups who are the main consumers of domestic services.

31.
An estimation method has been adopted to come up with reasonable figures. However, the
estimation procedure is hard to perfect given the abovementioned bias in the frame. Reliable data on
domestic servants can be obtained if a specific sample of the frame for the Survey of Rent and
Domestic servants is prepared by stratification so as to give more weight to middle and upper income
groups.

SURVEY OF URBAN INFORMAL SECTOR

32.
The informal sector was brought about by lack of full employment in the modern sector. In
many African countries, for example, there was a shortage of manpower at the time of independence
and therefore the public and private modern sectors managed to absorb all the job seekers. However,
over time, the modern sector has not managed to absorb all the labour force. Employment stagnation
in the agricultural sector which used to be the main employer in the rural areas, coupled with peoples
preference for white collar jobs, has led to an exodus of people from rural to urban areas with the
expectation of obtaining better-paying jobs. Consequently, both population and labour force in urban
areas has been increasing rapidly in the last two decades. On the realisation that no jobs are
forthcoming in urban areas, the urban unemployed have tended to engage in informal sector income
generating activities.
33.
The unemployment problem in the developing countries has been worsened by economic
stagnation and high population growth. The government, which is the major employer, has been
forced to cut down the size of its labour force or has enacted policies to keep out new entrants or
hastened the exit of existing labour (e.g. through reduction of retirement age) to curtail budget
deficits. The resultant effect is that there has been massive unemployment and these people have had
to seek recourse in the informal sector. Also engaged in the informal sector are low-income earners in
the formal sector to supplement their low salaries in the formal sector.
34.
The informal sector acts as a sponge and absorbs the excess labour especially in urban areas.
According to the International Labour Office, the major job creator is the informal sector, which is
responsible for creating 59 percent of the jobs in the African urban areas as compared to the modern
sector which employs only an estimated 25 percent. This implies that jobs generated directly by
investment in the formal sector, where much of the development efforts have in the past been
concentrated, accounts for only a small fraction of the total employed. Later studies in Africa
confirmed the ILO findings that small scale labour-intensive industries are indeed efficient and
profitable but are discriminated against in accessing borrowed capital from the formal money market4.
The informal sector also acts as a training ground for those with no skills. Many apprentices learn on
the job.
Definition of the Informal Sector
35.
There is no precise definition of the informal sector. Different people perceive it differently.
According to Sethuraman (1976) 5, an enterprise can be considered as belonging to the informal sector
if it has at least one of the following characteristics:
i

Employ not more than 10 persons;

Derek Byerlee, Carl K. Eicher, Carl Liedholm, and Dunstan S.C. Spencer, Rural Employment in Tropical
Africa: Summary of Findings, Working Paper No. 20, African Rural Economy Program, Department of
Agricultural Economics, Michigan State University, East Lansing, February 1977.
5 S.V. Sethuraman, The Urban Informal Sector: Concept, Measurement and Policy, International Labour
Review, 114(1), July-August 1976. See also, International Labour Office, Resolution concerning statistics of
employment in the informal sector, adopted by the Fifteenth International Conference of Labour Statisticians,
Geneva, 19 to 28 January 1993. The latter observed that regular data collection on the informal sector should
preferably be based on a household survey approach, with households as reporting units and individual
household members as observation units, while occasional in-depth studies should preferably be based on an
establishment survey approach or a mixed household and enterprise survey approach, or a combination of both,
with the informal sector units themselves and their owners as observation and reporting units.

ii
iii
iv
v
vi
vii
viii

Act not in compliance with labour and administrative provisions;

Employ workers who are members of the entrepreneurs family;
Lack working timetable or fixed working days;
Lack capital from official financial institutions;
Employ mostly workers with less than 6 years of schooling;
Not use mechanical or electric power;
Have no fixed premises or occupy rudimentary or temporary sites.

36.
According to a Study on the Role of the Informal Sector in African Economies6, some four
major approaches appear to have been accepted as a basis for understanding the sector:
i

ii
iii
iv

Labour Force: Activities are categorized according to the characteristics of the labour. The
implication is that the informal sector uses levels of education as the discriminating factor in
allocation of labour. The major employer of unskilled or semiskilled labour is considered to be
the informal sector.
Labour Force and Volume of Capital: The informal sector is defined as the sum total of
activities at the lowest level of the small and medium-scale enterprises.
Sources of Factors of Production: Informal sector relies heavily on family own factors of
production e.g. own labour and savings.
Lack of registration: Activities are generally not registered, neither pay tax nor respect salary
and labour legislation.

37.
As per Central Bureau of Statistics definition, informal sector consists of semi-organized and
unregulated activities largely undertaken by self-employed persons in the open markets, in market
stalls, in undeveloped plots or on street pavements within urban centres. They may or may not have
licenses from local authorities for carrying out such activities as tailoring, carpentry, black-smithing,
grocery, kiosks, meat and maize roasting, sale of apparel and shoes, open air restaurants, repair of
footwear, car repair, shoe shining, hair cutting, etc (Central Bureau of Statistics, Employment and
Earnings in the Modern Sector 1981, 1984)7.
38.
It is evident that the informal sector is the aggregate of activities that results from the need for
earning ones living because other sectors of the economy are unable to provide adequate employment
opportunities for the rapidly growing labour force. These activities are heterogeneous in nature,
operating in unregulated and competitive markets, often having very little capital and equipment, and
use simple labour-intensive technologies. In most cases, the business owners operate outside of the
legal requirements of the local government authorities.
Data Collection Methodology
39.
Information on informal sector is collected through an annual sample survey in all urban areas
which, according to the 1979 population census, had more than 2,000 persons. The purpose of the
survey is to provide information to assist in the planning of the sector. The survey has been a useful
source in determining the contribution of the informal sector in eradicating unemployment. The

United Nations, Economic Commission for Africa, Study on the role of the informal sector in African
economies, Seventh Session of the Joint Conference of African Planners, Statisticians and Demographers, Addis
Ababa, Ethiopia, 2-7 March 1992.
7 Also cited in: S.O. Noormohamed, The usefulness and limitations of CBS data: An illustration, in: Kenya
Symposium on Statistical Surveys, Central Bureau of Statistics, Ministry of Planning and National Development,
1988.

10

specific objectives of the survey are to provide data which will assist in determining:
i
ii
iii
iv

The contribution of the sector towards creating employment opportunities in the country;
The relative importance of the sector and its contribution in the Kenya economy;
The size and geographical distribution of informal sector establishments; and
The occupational characteristics of the workers engaged in the sector.

40.
The informal sector activities have high entry and exit rates. It is therefore not possible to
maintain an up-to-date frame. Sample units are systematically selected and interviewed at the same
time. Data on people engaged and their earnings are collected, and for classification purposes, type of
business and activity. From 1973 to 1975, the sample survey was undertaken in Nairobi, Mombasa,
Kisumu and Nakuru. Since 1976, the sample survey has covered all urban centres having populations
of 2,000 or more, excluding those in North Eastern Province. Analysis of data from the 1984 survey of
the urban informal sector is reported in Economic Survey 1985.
41.
The enumerators use the tally method to count the number of establishments and the number
of persons engaged. This information is recorded for the five major economic activities: manufacturing
(ISIC group 3), construction (ISIC 5), wholesale and retail trade, hotels and restaurants (ISIC 6),
transport and communication (ISIC 7), and services (ISIC 9). Economic activities not elsewhere
classified are denoted by zero. At the end of the tally exercise, it is then possible to determine the total
number of activities per each major ISIC group. Thereafter, a 10 percent systematic sample is derived
for each ISIC group. This will give a fairly representative sample of all the informal sector activities
existing within a given urban area. Maps are usually provided to assist the enumerators to identify the
boundaries of their areas of operation. The urban areas are normally divided into small enumeration
areas to ensure complete coverage of the informal sector activities without omission and to avoid
double counting.
Data Limitations
42.
As already mentioned, the maintenance of an efficient sampling frame has not been
practicable. The following problems have contributed to this scenario:
a) Lack of a sample frame due to high incidence of entry and exit.
b) In general, respondents have low levels of education and therefore do not keep proper books
of accounts. This limits the scope of the quantitative information that can be collected.
c) Inadequacy of funds to survey a large number of informal sector units.
d) Respondents conceal information on the belief that the survey data will be used for taxation
purposes.
e) The data collected relates to the urban informal sector establishments only. It is not clear as to
what is the structure and proportion of the informal sector in rural areas. Even for the urban
areas, activities located in households are omitted. However, to overcome this problem, CBS
proposes to introduce a two-stage sampling: households, then establishments. Towards this
end, a pilot survey was undertaken in June 1993 in five major towns: Nairobi, Mombasa,
Kisumu, Nakuru and Eldoret. The results are yet to be analyzed.
f) Gross earnings are reported without deducting costs of inputs e.g. raw materials, wages and
rent, thereby making it difficult to derive net earnings. This is due to the difficulty of soliciting
reliable response on sources and costs of inputs and wares.
g) Total employment figures relate to total persons engaged without classifying them by
employer/employee status.

11

h) The lack of a predetermined frame gives enumerators the discretion to decide on the
establishments to interview, without necessarily following the laid-down procedures. This
does not guarantee completeness of coverage and reliability of data collected. The problem
makes it difficult to give the general trend in total employment in the sector as the coverage in
each town might change from year to year and the number of towns included changes over
time.
i) The survey does not normally cover certain economic activities e.g. the matatu subsector.
43.
To arrive at the total wage employment in the modern sector, data from all the above sources
are aggregated and published under the title, Employment and Earnings in the Modern Sector.
However, it should be noted that the data have shortcomings:
i

ii

Data on wage employment covers both rural and urban sectors but those of small scale
enterprises pertain to urban areas only. A lot of informal sector activities in rural areas are
therefore left out.
Due to lack of a suitable sample frame and definitional problems, data on domestic servants are
not reliable and could be underestimated.

A big proportion of labour data that go into the calculation of labour costs components of GDP are
provided by this source. However, it seems that the statistics are underestimated. Caution therefore
needs to be exercised in their interpretation.
SURVEY OF INDUSTRIAL PRODUCTION
44.
CBS conducts other regular establishment-based surveys to monitor performance of various
sectors of the economy. For example, Business Expectation Enquiry and Survey of Industrial
Production (SIP) generate employment data focused on the industrial sector. The surveys cover a
sample, usually of firms employing 50 or more persons, and vary in coverage. In addition, while the LE
survey takes the establishment as the statistical unit of enquiry (respondent), most of the other surveys
take firm as the respondent, mainly because employment data is not the domain of their study.
45.
Since the first industrial production survey was conducted for reference year 1954, others
have been conducted for reference years 1956, 1957, 1961 and annually since 1963. Enquiries for
reference years 1961, 1963, 1967 and 1972 took the form of a census. Up to and including 1963, all
establishments engaging 5 or more persons were covered, and from 1964 to 1969 the coverage was
restricted to firms engaging 50 or more persons. Surveys for 1970 and 1971 covered firms engaging
fifty or more persons plus a 25 percent sample of those engaging between 20 and 49 persons. In 1972,
the coverage was extended to all establishments (see 1979 Statistical Abstract).
46.
The survey covers three sectors: mining and quarrying, manufacturing, and building and
construction. Firms covered are stratified by employment. In the surveys of 1973-1976, firms engaging
fifty or more persons were covered in full and a sample (25 percent) was selected from the group
employing between twenty and forty nine persons. Firms employing less than twenty persons were
not covered because they presented particular response problems. For convenience, the latter group of
firms is divided into three groups: those employing 5 to 19 persons; those employing 1 to 4 persons;
and rural non-agricultural enterprises employing 1 to 4 persons.
47.
Information for the category of firms employing less than 20 persons was estimated. Data on
persons engaged, gross earnings, and inputs (e.g. wages, water, transport) was collected through a mail

12

questionnaire supplemented by secondary statistics from the ex-community Government

Corporations. To obtain aggregate statistics for the annual SIP, data for firms employing 20-49 persons
are grossed up (blown-up) to obtain totals for this category of firms. However, every five years, a
Census of Industrial Production (CIP) is undertaken. The CIP differs from the SIP because it covers all
firms employing 20 or more employees, and only takes a 50 percent sample of firms employing 5 to 19
persons and 25 percent of those employing 1 to 4 persons (see 1980 Statistical Abstract). In addition,
CBS undertakes a quarterly Business Expectation Enquiry for all industrial sectors (excluding
electricity and water), which includes employment and earnings statistics.

EMPLOYMENT DATA FROM AD HOC CBS SURVEYS

48.
There are ad hoc surveys such as population censuses, household budget surveys, labour force
surveys and manpower surveys, which give reliable estimates of the stock of employees in the country.
Such surveys provide benchmark data that should be used in both projecting and revising employment
data. Some ad hoc surveys conducted to meet specific data needs include:
a)
b)
c)
d)
e)
f)
g)
h)

Rural Non-farm Activity Survey, 1977

Survey of Rural Non-Agricultural Enterprises, 1985
National Manpower Survey, 1986-88
Labour Force Survey, 1977/78
Urban Labour Force Survey, 1986
Rural Labour Force Survey, 1988/89
Household Budget Survey, 1974/75, and
Household Budget Surveys: Rural (1981/82) and Urban (1982/83)

With exception of Survey of Rural Non-Agricultural Enterprises 1985 and National Manpower Survey
1986-88, all others used the household as the unit of investigation. This has special significance in that
households are the suppliers of labour.
49.
Although CBS is the principal collector of labour data in the country, other Government
departments have assisted in the collection and analysis of labour data. For instance, the Manpower
Planning Department of the Ministry of Manpower Development and Employment conducted the
National Manpower Survey in 1986-89 to update the Manpower Survey of 1972 as the results of the
1981/82 Manpower Survey were not published. To update the Labour Force Survey of 1977/78, the
Long Range Planning Unit of the Ministry of Planning and National Development conducted the
Urban Labour Force Survey in 1986 and later in 1988-89 undertook the Rural Labour Force Survey.
50.
Participation of CBS in surveys undertaken by other Government departments has always
been very significant due to the following reasons:
a) CBS maintains the Register of Establishments which serves as the frame for
establishment-based surveys. Without the register, the National Manpower Survey would
have been difficult, if not impossible.
b) CBS has a well developed infrastructure for household-based surveys including a master
sample frame and trained permanent field enumerators.
c) All national surveys are undertaken under the Statistics Act and any institution intending to
conduct such a survey must obtain prior clearance from the Director of Statistics in accordance
with the Act.

13

51.
The input of the CBS in these surveys has been mainly technical covering questionnaire
design, sampling and data collection. Data processing and analysis is carried out by the department
sponsoring the survey. Analysis of the 1986-89 National Manpower Survey was done by the Ministry
of Manpower Development and Employment while analysis of the 1986 Urban Labour Force Survey
and 1988/89 Rural Labour Force Survey was done by the Long Range Planning Unit. The arrangement
of pooling resources and skills has worked well and the results are produced and published timely.
This applies not only to labour-related surveys but to all the surveys undertaken jointly by the Central
Bureau of Statistics and other Government departments.
RURAL NONFARM ENTERPRISES SECTOR
52.
According to Rural Household Budget Survey of 1981/82, nonfarm enterprises accounts for
about 17 percent of household incomes and is the main source of income for an estimated 9.9 percent
of rural households (see Table 1 below). In spite of its importance to rural incomes, data pertaining to
employment in rural nonfarm enterprises is scanty. CBS conducts sample surveys on rural nonfarm
enterprises on ad hoc basis, the latest of which was undertaken in 1985/86. The surveys cover
establishments in rural trading centres with a population of less than 2,000 persons. Unfortunately, the
surveys do not provide proper estimates of total size of the rural nonfarm sector, though useful for
assessing its sub-sectoral composition.
Table 1: Average Household Net Monthly Income by Main Source and Other Sources (KShs)

Farm enterprises
Non-farm enterprises
Salaries and wages
Other sources
Average total
% of income
Farm enterprises
Non-farm
Salaries and wages
Other sources
Average total
Percent of households

Farm
548
76
57
92
773

Non-farm
255
742
59
216
1,272

70.9
9.8
7.4
11.9
100.0
58.7

20.0
58.3
4.6
17.0
100.0
9.9

Main source of net income

Wages/Salaries
Other Sources
168
165
39
130
630
29
20
337
857
661
19.6
4.6
73.5
2.3
100.0
21.4

25.0
19.7
4.4
51.0
100.0
10.0

Total
399
140
177
114
830
48.1
16.9
21.3
13.7
100.0
100.0

Source: F. A. Opondo, Rural Household Budget Survey 1981/82: Highlights, in: Kenya Symposium
on Statistical Surveys, Central Bureau of Statistics, September 1988
53.
Most of rural nonfarm activities are household-based, usually undertaken on part-time basis
using unpaid family labour. According to a survey of rural Kenyan households, undertaken in 1977
within the Integrated Rural Surveys to determine the nature and extent of nonfarm activities, at least
50 percent of the households were engaged in at least one of such activities and nearly one out of four
engaged in two or more (see Rural Non-Farm Activity Survey 1977, Social Perspectives, Volume 2, No.
2, June 1977; and The Integrated Rural Surveys 1976-79, Basic Report). The survey covered activities
which are rural in nature, and therefore excluded formal sector activities such as teaching and
employment in government. Estimation of employment in nonfarm activities is intrinsically difficult.
Due to the inadequacy of data, estimates of employment in rural nonfarm enterprises are often derived

14

as a residual by subtracting modern wage employment, small farm and pastoral employment, from
estimates of the rural labour force.
SURVEY OF RURAL NON-AGRICULTURAL ENTERPRISES, 1985
54.
The Survey of Rural Non-Agricultural Enterprises was undertaken from December 1985 to
April 1986 and had 1985 as the reference period. The survey had three main objectives:
a) To obtain information that would help estimate the contribution of rural-based activities to
wage employment and earnings;
b) To secure information on rural sectoral contribution to Gross Domestic Product; and
c) To shed light on the sectoral dispersion of rural non-agricultural enterprises.
55.
Three sectors were covered: manufacturing, distribution, and services. The industries
excluded from the survey are building and construction, mining and quarrying, transport, and
handicrafts. The survey was establishment-based, and therefore excluded household-based enterprises
e.g. tailoring and beer brewing. All establishments included in the Master File were also excluded
since they are covered in the Annual Enumeration of Employees and Self-Employed Persons. The
survey covered a sample of 67 rural and market centres selected from 525 centres listed in the
1979-1983 Development Plan. Information was collected from all unregistered establishments in each
selected centre with identifiable activities and engaging not more than 10 persons (working for pay or
profit). Care was taken not to include any centre with a population of more than 2,000 persons as this
would fall outside the definition of a rural centre. Information was obtained through personal
interviews by permanent field enumerators who were trained prior to commencement of the survey.
Information regarding persons engaged, and gross earnings and inputs (e.g. wages) were collected.
This made it feasible to compute gross product for this sector8. The data was grossed up to obtain
district, province and national totals taking into account the rural and market centres not included in
the sample survey.
56.
Information on small rural non-agricultural enterprises for the years 1973, 1974, 1975 and
1976 is reported in the Report on Surveys of Industrial Production. However, only three sectors were
covered: mining and quarrying, manufacturing, and building and construction. As it appears, this
information was collected as a subset of the Survey of Industrial Production. This means that
distribution and services were not included. In effect, therefore, comparison with the results of the
1985 survey is rather difficult.
THE NATIONAL MANPOWER SURVEY, 1986-1988
57.
Manpower surveys facilitate the study of some characteristics of employed persons and assist
in determining their current and future stocks, and supply and demand patterns. Until recently,
manpower surveys were designed to collect data on high-level manpower as its supply was regarded as
a critical factor in development. This approach changed gradually as it became evident that the lower
levels of manpower were also important. The first manpower survey was conducted in 1964 and aimed
at collecting data on high-level manpower. Two more surveys were undertaken in 1967 and 1972 and
extended their coverage to include high and middle-level manpower but still excluded low-level
8

L.A. Ojiambo, Small Scale Business Enterprises Sector (informal sector) in rural Kenya: Concepts and
Preliminary GDP estimates for 1985, in: Kenya Symposium on Statistical Surveys, Central Bureau of Statistics,
Ministry of Planning and National Development, 1988.

15

manpower. An attempt was made to carry out a comprehensive survey in 1982/83 but due to some
constraints the survey did not succeed. Arising from the non-completion of the 1982/83 survey, the
need for manpower data necessitated the execution of the 1986/88 National Manpower Survey. The
survey covered 2,201 establishments in the modern sector out of 2,483 that were sampled. The total
number of establishments in the modern sector was 42,378. The reference period of the survey was 1st
February to 30th June 1987 and achieved a response rate of above 80 percent.
58.

The objectives of the 1986-88 National Manpower Survey were to:

a) Determine the stock and distribution of various categories of manpower in the modern sector;
b) Collect and determine characteristics of employed persons in the modern sector of the
economy;
c) Collect information which would assist in determining the number of vacant posts within
different sectors of the economy and assess the possible areas of emphasis in trying to alleviate
the unemployment situation;
d) Assess the relationship between demand and supply of manpower in the economy in order to
determine both current and future manpower balances;
e) Determine ways of improving the existing system of occupational classification in Kenya;
f) Assist in the formulation of long-term manpower development and utilization policies and
determine the profile of wages and earnings by occupation and economic activity;
g) Assist government in planning and programming educational and vocational training systems
more appropriate to the economys manpower requirements; and
h) Contribute towards the development of a sustained manpower databank which would
improve Kenyas capability for overall manpower planning.

59.
Survey work was done in two phases: Phase 1 covered employees and information was
collected on a form designated as Form A, and Phase 2 covered employers and used a form designated
as Form B. The response rates achieved were 88.6 percent and 96.6 percent for phase I and phase II,
respectively. Non-response is attributed to the inadequacy of the frame, in particular the Register of
Establishments. It was in some cases found to include some establishments which had ceased to exist
and some agricultural establishments that had been subdivided into smaller units. Important
characteristics of the employees covered in the survey included age, sex, citizenship, and highest level
of education and training attained.
Methodology Used in the 1986-1988 Manpower Survey
60.
The survey adopted a revised and updated 1982 Kenya National Occupational Classification
System (KNOCS) which was harmonized with national needs and the 1986 Draft Report of the ILO
International Standard Classification of Occupations (ISCO). In addition, the register of
establishments in the modern sector maintained by the CBS was updated. The survey was based on a
sample of establishments randomly selected from three sampling frames, i.e. (a) Register of
Establishments maintained by CBS for private sector, state corporations and municipalities, (b)
Nominal Civil Service (CS) roll, and (c) a list of educational institutions maintained by the Teachers
Service Commission (TSC). For the purpose of sample selection, establishments were the Primary
Sampling Units (PSU) and all manpower within the selected establishments were interviewed. In all
cases, a one-stage selection design was maintained resulting in simple estimation methodology. The
establishments were identified as falling in four categories: private establishments, municipalities,
TSC, and CS.

16

61.
The instrument used for data collection was the questionnaire which had two forms, A and B.
Form A collected the name of establishment, the name of the employee, age, sex, highest level of
education reached, training background, mode of training, current and previous occupation, number
of previous employers, remuneration in those occupations, and whether housed or not. Form B was
used to countercheck the accuracy of information reported in Form A and collected data on
promotions, entries, exits and the number of vacant posts in various occupations.
62.
A pilot survey was conducted to test the questionnaire design, field logistics, survey
methodology, and sample frame. The findings of the pilot survey indicated shortcomings and
inadequacies in sample frame, logistical arrangements, questionnaires and KNOCS. Consequently, the
sample frames were updated, logistical arrangements were streamlined, the questionnaire variables
were rearranged, and KNOCS was improved and expanded in readiness for the main survey. Data
collection was through the enumerator-canvasser method. The country was divided into nine regions,
conforming with provincial boundaries except Rift Valley province which was subdivided into two
regions.
Limitations and Constraints in the 1986-1988 National Manpower Survey
63.
As noted in An Overview Report of National Manpower Survey 1986-1988 (1988), while most
of the objectives were addressed, four main areas were not fully addressed due to various inadequacies
in the data:
a) Data on new occupations which were not in the Kenya National Occupational Classification
System (KNOCS) were not analyzed.
b) Information on manpower supply was incomplete because only output from local education
and training institutions was considered. This was because data on Kenyans training abroad is
either sketchy or unavailable.
c) The questionnaire used could not determine whether or not employees not physically housed
by the employer were given house allowance.
d) Complete analysis of employment dynamics could not be ascertained because the data from
Phase II of the survey had not been weighted.
64.
Survey results indicated that Kenya National Occupational Classification System required
further refinement as new occupations were encountered that were nonexistent in the KNOCS. The
revised 1986 KNOCS was an improvement on the 1982 version. In spite of this revision, a number of
occupations were still lumped together which made the classification imprecise in a number of cases.
For example, because certain occupations could not get their exact equivalents in KNOCS, they were
lumped under category other. These shortcomings were particularly more evident in medical and
technical occupations, especially at the middle level. It was therefore recommended that the KNOCS
be further refined to make it more precise and hence more relevant to the Kenyan labour market. In
addition, information on whether those not physically housed by their employers, especially in the
private sector, were given house allowance was not easy to determine due to the questionnaire design.
65.
The register of establishments maintained by the CBS was found to be inadequate. Some
establishments had either ceased to exist or had been subdivided into a number of smaller ones which
had since changed their names. Such cases were common in agriculture, and transport and
communications. The coverage in these two industries was relatively low due to this problem. There
was also non-response of employees in some establishments due to their non-availability at the time of
the survey.

17

66.
With regard to the development of manpower databank for use in manpower planning, it was
observed that manpower data was not gathered and analyzed in a well coordinated manner. The
Central Bureau of Statistics, for instance, collects employment data on an annual basis through its
postal labour enumeration surveys which has problems of reliability due to low response rates.
Another problem is with regard to the occupational classification which is over-aggregated thereby
reducing its utility for manpower planning. This was the basis for the recommendation that the
Ministry of Manpower Development and Employment should establish a national manpower
information system to act as the countrys manpower databank. The system should be updated
periodically through undertaking of sectoral manpower surveys and other specialized studies on the
countrys human resources development and utilization. The ministry should also coordinate the
various aspects of human resource planning and development.
LABOUR FORCE SURVEYS
67.
Kenya has undertaken three major labour force surveys which, taken together, provide a
wealth of information on the structure and composition of the labour force. The surveys are:
i
ii
iii

The 1977/78 Labour Force Survey (LFS)

The 1986 Urban Labour Force Survey (ULFS)
The 1988/89 Rural Labour Force Survey (RLFS)

The last two surveys were undertaken in recognition of the fact that important changes had occurred
since 1977/78 and of the need for furthering the understanding of the dynamics of labour force
activity in Kenya. The ULFS and RLFS were designed to complement each other so as to provide an
overview of the Kenyan labour force. A summary of the findings from the 1977/78 LFS are given in
Economic Survey 1981 and the 1986 ULFS in Economic Survey 1990, while analysis of women and the
labour force based on the three labour force surveys is summarized in Economic Survey 1991.
68.
The outline begins by giving a brief theory that applies to the unemployment and
underemployment situation in Kenya. It then gives an outline on the application of labour force
concepts in the Kenyas surveys. And finally, it gives a brief account of each labour force survey and a
comparison among them.
Labour Force concepts
69.
The term unemployment is taken to mean open unemployment, as opposed to any other form
of labour underutilization and includes both voluntary and involuntary unemployment. The notion of
voluntary unemployment does not imply that workers want to remain unemployed indefinitely; it
means that at least for a period of time, they prefer to wait and search rather than to accept
employment at the going wage, and is related to the gap between modern and informal sector wages,
as well as alternative income opportunities like family support and/or charity.
70.
The causes of labour underutilization in the Kenyan economy may be described as a
consequence of the dualistic nature of the economy which is defined by the following stylized facts:
a) Coexistence of modern and more traditional technology and related conditions within the
same time and space;
b) Superiority of, and consumer preferences for, modern sector products;
c) Relative capital intensity of modern sector products which were typically designed for
high-income demand;

18

d) Scarcity of capital and skilled entrepreneurship;

e) Segmentation of factor markets, especially of the labour market, into a higher-wage modern
segment and the lower-wage informal and agricultural segments; and
f) Various policy biases in favour of the modern capital-intensive sector.
71.
A theory of dualistic economy explains how these conditions interact and generate labour
underutilization, income inequality and poverty. It relates the existence of underemployment to the
characteristics of the dual economy and treats unemployment as an extreme form of
underemployment. In a theory of labour markets with well-behaved demand and supply functions,
involuntary unemployment result from downward wage rigidity; and a general weakness of labour
demand relative to its supply due to rapid population growth and migration on the supply side, and
mismatch between labour quality requirements and availabilities as well as scarcity of other
complementary factors on the demand side. The latter is caused by the relative capital intensity and
dominance of modern sector goods and services combined with the scarcity of capital and skilled
entrepreneurship.
72.

Stylized facts of urban unemployment in Kenya, abstracted from the 1986 ULFS are:
Urban unemployment, as measured in the survey, is not high by the standards of developed
countries;
The survey did not find a lot of disguised unemployment at least by some definitions; and
The youth unemployment is very high compared with overall levels and female
unemployment is more than male unemployment.

73.
Labour force participation rate is the proportion of persons in a given age group who either
worked a minimum of one hour in the last week (or yesterday in the case of 1977/78 LFS), or were the
head of a farm or business in the last week (yesterday). All labour force measures are made with
respect to a specific time period and generally refer to either the usually active population, or the
currently active population.
74.
The currently active population refers to a short reference period, either one day or one week.
The ULFS and RLFS measurements of the currently economically active population used both a
one-week and a one-day reference period. The one-week reference period permits comparison
between the two surveys, while the one-day reference period permits comparison with the 1977/78
LFS.
75.
The working age population: In rural Kenya, the working age population includes all persons
aged over seven years for both LFS and RLFS. The non-working age population was defined as all
persons seven years of age or less. The non-working age population was excluded from all labour force
analysis. The participation rate measures the proportion of the working age population who belonged
to the labour force. In both the LFS and RLFS, rural participation rates were very close to 100 percent,
and hence rates of open unemployment were almost zero.
76.
Economic activity of labour was defined to include all persons who either (a) worked one hour
in an economic activity during last week/yesterday, (b) were the head of a family farm, or (c) looked
for work in the last year. All persons who did not do any of these activities were defined as
economically inactive. The economically inactive persons belonged to the following groups: (a) the
voluntarily inactive (approximately one in every 8 Kenyans in urban areas chooses to be voluntarily
inactive, majority of whom are females, e.g. housewives and/or engaged in childrearing activities); (b)

19

discouraged workers who represent a small proportion of the urban population between 15 and 64
years of age (tend to be dominantly female and 90 percent are less than 40 years of age); and (c) still at
school fulltime.
77.
Employment was derived from the data on hours spent in specific activities in the last
week/yesterday. A person was considered to have been employed only if had worked a minimum of
one hour in an economic activity; or if no hours of work were recorded in the last week, a person must
be the head of the family farm (in the case of LFS and RLFS). A person was considered to be fully
employed if he worked a normal work week (or day), or if he worked less than the normal number of
hours, but did not look for an opportunity to work more hours.
78.
Unemployment and Underemployment: The normal time worked was defined to be 40 hours
per week. A person was underemployed if he worked less hours than the norm, and had shown that he
was not satisfied with his present employment by looking for a different job or an extra job. The rate of
underemployment was the number of underemployed persons as a proportion of all employed
persons. In the case of both the LFS and the RLFS, it was difficult to capture visible underemployment
without conducting a monthly survey, since many agricultural jobs were highly seasonal with
alternating slack and intensive periods.
79.
In addition, the urban labour force sampled only from those who were actually in urban areas,
while people in rural areas could be unemployed and searching for urban jobs by, say, counting on the
help of friends and writing letters while residing in the rural areas. These people would not be counted
as urban unemployed. This implicit unemployment model assumes that those who do not have
desirable urban jobs are trying to get one and must balance between being in the rural area, among the
urban unemployed, or among those employed in the urban informal sector. Consequently, the ULFS
attempts to discover the proportion of those employed that is dissatisfied and searching for other
work.
80.
Four definitions for unemployment rates have been derived depending on the type of job
search considered to be valid, and whether underemployment is included or not. The four definitions
are best distinguished using the following table:
Employment Status
Conventional Employment Status
Underemployment included

Valid Job Search Criteria

Active Search Only
Active and Passive Search
A
C
B
D

81.
Two definitions of job search activity are included in the ULFS: (a) the norm one, which
included a direct approach to an employer, union hall or labour exchange, answering a newspaper
advertisement, etc; and (b) a passive one which included asking friends and relatives as an
acceptable job search activity for being included in the labour force. There are, as a result, two
different measures of underemployment, one counting only those who qualify under only the
traditional or normal job search methods and one including those who qualify on the basis of having
used the passive methods. Including the amount of underemployment as part of overall
unemployment (A to B) increases urban unemployment by a meagre 0.6 percent. By the broadest
definition of search (including passive search), overall urban unemployment goes up by 2.9 percent,
from 14.8 percent to 17.7 percent, i.e. in moving from definition A to C.

20

82.
Definition A is the most restrictive and D the least restrictive. Thus, unemployment and
participation rates increase from A to D. Urban unemployment rates increase from the most restrictive
definitions of labour force and employment status to the least restrictive. Using the conventional
definition of unemployment, the overall participation rate is 81.5 percent for men and 54.4 percent for
women, and 69.3 percent overall. Irrespective of the underlying definitions, all aggregate participation
rates are higher for males than females by about one-third, except in the 15-19 age cohort. In terms of
age-groups, overall participation rates are lowest for 15-19 age group, evidently because of schooling,
and highest for the 40-44 age-group. Participation rates decline gradually for age cohorts beyond
40-44. The definition of unemployment is of importance not only for overall participation rates but
also for certain population disaggregation.
83.

A person was considered underemployed under the following conditions:

a) He/she reported in the survey that he/she was unhappy with his/her current job because it was
part-time;
b) He/she had looked for a job in the last week; and
c) The hours worked was below the hours norm specified for his/her particular education level
and sex.

84.
An appropriate hours norm was established by first examining the distribution of hours
worked for all fulltime workers of a given sex and education level. If the individual has more than one
job, total hours worked includes the sum of the hours he has worked in all jobs. Since the distributions
are so obviously non-normal, the hours norm was selected empirically using the bottom decile of the
distribution. This defines individuals in the bottom 10 percent of hours worked as underemployed.
The inclusion of underemployment in this manner has implications for participation rates. Individuals
who do not satisfy these three criteria for underemployment are treated as partially in the labour
force.
85.
A similar procedure was used for low wage individuals. In order to be considered
underemployed, they had to be:
a. Actively seeking work in the last week, and
b. Earning less than the wage norm for their particular sex and education level.
86.
Each underemployed individual was considered to be partially employed and unemployed
based on these criteria. The wage norm was set at the bottom decile of the wage distribution, and each
individuals employment rate calculated with respect to these wage norms. The treatment of
underemployment using these criteria has no effect on participation rates.
87.

Based on these definitions, the following are some of the urban labour force surveys results:
a) Inclusion of urban underemployment increases the conventional (definition A)
unemployment rate by 1.6 percent.
b) Extending valid job search to network through friends and relatives increases the rate by
about 1 percent from 15.4 percent to 16.4 percent.
c) The combined effect of (a) and (b) is to increase the aggregate unemployment rate by a little
over 3 percent to 18.2 percent.

21

d) These effects are also noticeable when males and females are analyzed separately. Though
female rates are double male rates, they are equally sensitive to the definitional extension of
valid job search.
e) The observations on unemployment rate-age patterns persist for all unemployment
definitions. However, with the inclusion of underemployment, the unemployment rate
increases proportionately more in the younger age groups than in the older cohorts, suggesting
a greater degree of underemployment for younger persons. Similarly, the inclusion of passive
job search raises the unemployment rate more for the youngest and oldest age groups, than for
those between 30 and 54 years.
The Methodology Used in the Labour Force Surveys
88.
In 1977/78, a labour force survey was undertaken as a module within the Integrated Rural
Surveys. The objective of this survey was to examine labour supply and its utilization. As detailed in
the Integrated Rural Surveys 1976-79, all the rural households covered by the survey and 3,000 urban
households were interviewed each month for a period of 12 months. All members of households,
including those attending school fulltime, were interviewed. Information collected included hours
worked on and off the holding, occupation and industry of employment, training received, and
whether or not respondents were looking for work. Results of the survey were analyzed and limited
copies of the report published in 1986. A summary of results was included in the 1981 edition of the
Economic Survey.
89.
In order to update the 1977/78 survey, an urban labour force survey was undertaken in 1986
and its rural component undertaken in 1988/89, using the NASSEP II frame. The two surveys were a
joint project of CBS and the Long Range Planning Unit of the Ministry of Planning and National
Development. The Rural Labour Force Survey was undertaken in two phases (July to November 1988
and February to June 1989) in order to capture seasonality of rural employment, while the Urban
Labour Force Survey was a single round. The two surveys were based on slightly different definitions
from those used in 1977/78 survey which limited the comparisons which could be made. The basic
difference is in the length of the reference period. In the 1977-78 survey, a single day reference period
or yesterday approach was used while the 1986 Urban Labour Force Survey and 1988-89 Rural
Labour Force Survey used yesterday approach and one week approach. All these surveys gathered
basically the same information but the 1988-89 Rural Labour Force Survey collected additional
information on urban to rural migration for purposes of job search.
90.
The coverage of the 1977/78 LFS was the entire country, both rural and urban. The aim of the
survey was to measure employment and unemployment. Urban unemployment was 6-7% of the
labour force, which was probably underestimated. It concluded that unemployment in rural areas was
virtually nonexistent and the concept of unemployment cannot therefore be usefully applied to rural
areas. But there did exist significant labour underutilization, as measured by the number of hours
worked per day.
91.

The 1986 ULFS was designed with the key objective of updating information on:
a) Estimation of participation rates and unemployment rates, as well as examination of the
importance of several determinants of these rates;
b) Analysis of the structure and composition of the labour force; and
c) Examination of the magnitude of open unemployment and of the significance of
underemployment.

22

92.
The survey results using one day reference period showed that the urban unemployment rate
remained the same as in 1977/78, while the participation and unemployment rates of females
increased. The overall rate of urban unemployment of 16.2 percent was lower than in most other
African countries.
93.
The 1988/89 RLFS was designed to provide an overview of the Kenyan rural labour force. The
objectives of the RLFS were:
a) To provide information on labour activities of rural residents;
b) To provide measures of participation, unemployment and underemployment; and
c) To complement the 1986 ULFS and therefore provide a complete scenario of the labour force
in Kenya in recent years.
94.
The 1988/89 RLFS covered about 95 per cent of the rural population in 30 out of 39 rural
districts (i.e. excluding Nairobi and Mombasa). The districts not covered included Lamu, Tana River,
Garissa, Mandera, Wajir, Isiolo, Marsabit, Samburu and Turkana. A 10 per cent sample was drawn
from the NASSEP II based on the 1979 census. A pilot survey conducted in March 1988 revealed that
the concept of employment was particularly difficult as most farmers and family farm workers did not
consider themselves to be employed. The questionnaire was subsequently redesigned to capture the
hours of work spent in various activities. The overall response rate for Phase I was 78.1 percent (8,102
households) and 77.5 percent for Phase II (7,869 households).
95.
Due to cost and time constraints, it was not possible to conduct a monthly survey to fully
capture the seasonality of rural employment. The timing of the survey, therefore, was designed to
provide two periods within which varying amounts of activity were recorded in rural areas. The
periods were chosen based on normal agricultural seasons in Kenya. The information collected in
RLFS included:
a)
b)
c)
d)
e)
f)

The structure of the economically active population in rural areas;

Patterns of employment, in particular, the nature and extent of nonfarm activities;
Hours of work in various activities;
Open unemployment in rural areas;
The magnitude of underemployment in rural areas; and
The educational attainment of respondents by age and sex.

96.
One major problem in the interpretation of the data arises from the definition of employment.
Only few rural respondents report as unemployed in the technical sense; but this may be obscuring a
high level of underemployment and hidden unemployment. This means that the unemployment rate
of 0.3 percent calculated on the basis of the Rural Labour Force Survey of 1988-89 could be hiding a
substantial level of unemployment and underemployment. However, the 16.2 percent urban
unemployment rate may be more representative of the picture in urban areas due to the nature of
urban economies in comparison with rural areas.
Comparisons among the Labour Force Surveys
97.
In comparing the 1977/78 LFS with the 1986 ULFS, the primary concern is whether
statistically significant changes in unemployment or participation rates have occurred over the 8-year
period. Despite comparable sampling designs and sample composition, the results must be made
compatible by adequately accounting for the differences in conceptualization and questionnaire
structure. The most significant difference is the length of the reference period used.

23

98.
As mentioned above, the three surveys were based on slightly different definitions of labour
force activity and unemployment. The most significant of these differences is the length of the
reference period used in the survey. The results suggest that the ULFS respondents are generally
representative of the urban population of Kenya with respect to both the age-sex breakdown and the
level of formal education.
99.
While the 1977/78 survey covered both urban and rural areas of the country, the 1986 ULFS is
limited to urban areas. Comparisons between the two surveys are thus limited to characteristics of the
urban labour force as follows:
a) The urban areas used in the 1977/78 survey are based on urban areas defined for the 1969
census, while the urban areas sampled for the 1986 survey are based on the urban definition
used for the 1979 census. Though these two populations are different, they are consistent in
that each includes all urban settlements with population exceeding 2,000.
b) Economic conditions were reasonably comparable in both time periods. Both were at or close
to peaks in the business cycle fuelled by high export prices. The 1977/78 survey was
concurrent, in part, with the 1976/77 coffee boom. In 1986, coffee prices, and to a lesser extent
tea prices, were also high, though not as high as in 1977. This lessens the difficulty of making
comparisons between the two surveys.
c) Survey methodology employed in the 1986 ULFS is quite similar to that used in the 1977/78
LFS.
100.
Both the 1977/78 LFS and 1986 ULFS enumerate all persons between 15 and 64 years. Key
differences between the concepts used in the two surveys were:
a) Labour force: Both the 1977/78 LFS and the 1986 ULFS follow the conventional definitions
utilized by the ILO. Labour force status for an individual is normally determined according to
a specific reference period. The ILO suggests two standard reference periods: the previous day
or the previous week. Long-term standards normally examine the year preceding the
interview. Because of the dynamics of employment for many individuals and the recall
problems associated with long reference periods, it has been common to use the short
reference periods for unemployment and labour force participation. The 1977/78 survey
utilized a one-day reference period while the 1986 used both.
b) Many people who say they want a job but have not been actively seeking work are termed as
discouraged workers. It is however not clear how such persons are identified in the 1977/78
survey since the question asking for methods of job search fails to include the categories asked
friends and relatives and waiting to hear from employers as possible responses. However,
the reference period for job search was clearly identified as the previous day. In 1986 ULFS,
both active and passive methods of job search were offered as alternatives to respondents, and
both one day and one week reference periods for job search were used. While the latter seems
more appropriate, the former permits comparisons with the 1977/78 survey. Labour force
participation rate is the proportion of the total population who are economically active during
the reference period and thus varies according to the conventional definitions of job search
(active or passive).
c) The 1977/78 LFS did not include any measure of underemployment. The definition of
unemployment used in the survey only includes those with no job at all. The 1986 ULFS

24

includes a measure of underemployment as well as conventional unemployment. The

underemployment measure determines the proportion an underemployed individual is
employed and the proportion he is unemployed.
101.
Unemployment rate definition for 1977/78 is determined by dividing the number of
individuals looking for work by the sum of the number of individuals looking for work and the
number who have a job. The questionnaire structure does not allow meaningful estimates of the
degree of underemployment comparable with other definitions used in the 1986 ULFS. The 1986
ULFS explicitly accounts for job search through relatives/friends while the 1977/78 survey does not. It
subsumes such passive job search in the other, please specify category, probably leading to a
downward bias in this form of search. Given the significance of passive job search uncovered in the
1977/78 survey, it is necessary to interpret these rates with caution. However, by redefining the
1977/78 rates to exclude passive job search, an unemployment rate directly comparable to definition A
is generated (see Annex Table 1).
102.
In the two surveys, the unemployment rates under definition A are quite similar, both
decreasing with age from the youngest cohort to the 40-44 age group, and then rising for the older age
groups. The male/female patterns are also similar, but female rates tend to be higher in the 1986
survey. The overall unemployment rate seems to have increased fractionally.
103.
With respect to participation rates, overall rates for 1977/78 are not available. However, in the
definition A of unemployment, the male participation rate was lower in 1986, by about 6 percentage
points, while the female rate had increased by more than 8 percentage points. Male rates were
comparatively lower for the younger age groups 15-24 in the 1986 survey. This contrasts the female
pattern for which participation rates were significantly greater in the 1986 survey than in 1977/78 for
age groups 25-54 (see Annex Table 2).
104.
The large differences in the rates using definition C are due to questionnaire design otherwise
the overall unemployment rate has not changed. Most of the changes in the unemployment rates are
due to a drop in male participation rates and a corresponding rise in female participation rates. The
female unemployment rate has increased significantly, while the male unemployment rate has
dropped fractionally.
EMPLOYMENT IN SMALL FARM SECTOR
105.
The Government recognizes that the bulk of employment opportunities will come from small
farms, urban small-scale and rural nonfarm enterprises. In view of this, it is important that reliable
employment data should be available for all those sectors. As pointed out elsewhere, surveys on rural
nonfarm sector are undertaken on ad hoc basis which means that data pertaining to the non-survey
years are estimated. The methodology of collecting data for the survey of small scale enterprises leads
to inadequate and unreliable database. Although the small farm sector is the dominant employer, no
survey has been conducted to gather comprehensive employment data on both crop and livestock
production sector directly.
106.
Prior to 1974, the CBS conducted a wide variety of sample surveys in the rural areas to meet
specific individual objectives. The data were often found to be internally inconsistent and of limited
application, and were therefore not published. This means that data on employment in the small farm
sector do not exist for the period prior to 1974.

25

107.
The integrated sample surveys programme was established in 1974 and two surveys which
gathered data on employment in the subsistence sector have been conducted. These are the 1977/78
Labour Force Survey and 1988-89 Rural Labour Force Survey. The two surveys, particularly the
1988-89 Rural Labour Force Survey, provided a basis on which employment in small farms could be
estimated.
108.
The analysis of employment in the crop and livestock sectors encounters severe conceptual
problems because the database is extremely weak. However, employment in the crops sector can be
estimated by using estimates of crop planted area while employment in livestock production can be
estimated by applying estimates of labour employed per livestock head to estimates of the number of
the national herd9. The 1989 estimates derived in this manner closely compare with the results of the
1988-89 Rural Labour Force Survey. For example, crop area-based estimate of total employment in
1989/90 is equivalent to 2.17 million fulltime jobs (comprising 270 eight-hour days per year) compared
with 2.62 million jobs estimated by the Rural Labour Force Survey. For livestock production, the
Rural Labour Force Survey estimated 1.44 million jobs while estimates based on herd size were 1.76
million jobs. The Rural Labour Force Survey did not cover the main pastoralist districts. Employment
in these districts is estimated as 1.03 million jobs. Thus, total employment in the small farm sector is
estimated at about 5 million comprising crop-related activities (2.17 million), livestock in
non-pastoralist areas (1.76 million) and pastoralist areas (1.03 million).

EMPLOYMENT DATA FROM OTHER AGENCIES

109.
There are other Government and nongovernmental institutions involved with collection or
culling of employment and earnings data in the country. Among them are the line ministries such the
ministries of Labour and Education. The Registrar of Companies, a unit within Attorney Generals
Chambers, keeps files for all registered companies. Information contained in the files is used to update
the frame the CBS uses for collecting employment data through establishment-based surveys. Other
institutions compiling data on employment and earnings include the Federation of Kenya Employers
(FKE), the Central Organization of Trade Unions (COTU), educational institutions, and researchers.
International institutions such as the International Labour Organization (ILO) and the World Bank
also cull employment and earnings data from primary sources in compiling country profiles.
MINISTRY OF LABOUR AND MANPOWER DEVELOPMENT
110.
In 1990, the Ministry had seven main units: Planning and Research unit, Labour unit,
Industrial Relations unit, Directorate of Occupational Safety, Manpower Planning, Manpower
Development, and Employment Bureau.
Statistical Information Collected
111.
Individual units of the Ministry generate their own internal employment statistics as a
by-product of their administrative processes. In addition, the Planning and Research unit and
Manpower Development unit coordinate data collection activities that involve sample surveys and
censuses. The available statistical information includes:
i

Data on registered industrial agreements - monthly.

.
The area-based (for crops) and herd-based (for livestock) estimates of employment in agriculture were
used in the 1979-83 Development Plan.

26

ii
iii
iv
v
vi
vii

Data on registered industrial disputes - monthly.

Number of strikes and unionisable members involved - annually.
Basic minimum wage - annually.
House allowance deduction in selected urban centres - annually.
Number and type of work-related injuries and accidents by industry - annually.
Data on persons registering as unemployed, collected from the 32 district Employment
Offices.
viii Data on employment in local institutions through an annual postal survey conducted by
Employment Promotion Section, and also through sectoral manpower surveys conducted by
Manpower Planning Section.
ix Data on training in local institutions through a survey conducted by Manpower Planning
Section.
Dissemination Procedures
112.
The Ministry of Labour disseminates labour statistics in the form of annual and specific
reports. The Ministry has of late published the following reports:
i
ii
iii
iv

Strikes Reports by Industry annually.

Basic minimum wage and House Allowance deductions for selected areas - annually.
Annual Report for the Ministry of Labour - last produced in 1987.
Report on the Negotiated Wages and Other Terms and Conditions of Employment Registered
by Kenya Industrial Court, 1985.

113.
The Ministry also supplies ILO and other users with labour statistics on specific requests. Such
data are supplied in form of returns to ILO and in their raw form to other users within the country.
REGISTRAR GENERALS OFFICE
114.
The Registrar Generals Office collects massive information as a by-product of the registering
of events and occurrences. However, the only bearing it has on labour statistics is that it is the major
source of the units of the CBS Master File (MF). The MF is used as a survey frame in conducting
establishment-based surveys that generate labour statistics, among other data series.
115.
In particular, information from three units within the Registrar General Office is used in
updating the MF. The sections are Business Names Registration unit, Limited Companies Registration
unit, and the Bankruptcies and Liquidation unit.
Information Collected
116.
(i)
The Business Names Registration unit compiles names of all businesses applying and
accepted for registration. The list is kept in alphabetical order by dates of registration.
The CBS obtains a copy and uses it to enrich the MF by appending new names to it.
(ii)

The Bankruptcies and Liquidation unit maintains a list of businesses closing through
liquidation. A copy of this list is used by CBS in deleting such cases from the MF.

(iii)

The Limited Companies Registration unit monitors performance of companies

through their annual returns. Before deleting a name from the MF, CBS crosschecks
whether the firm has submitted a return to this unit. If a return has been received

27

showing the firm is still in operation, the name of the firm is not deleted, proving that
the source of information leading to deletion was wrong.
Limitations
117.
(i)

(ii)

The main problem is the manner in which information is kept with the Registrar
Generals Office. It is very difficult to access information from a multitude of
individual files. Retrieving relevant information with ease can only be accomplished
by computerizing the filing system.
The other problem in using the list of business names registered to update the MF is
that in some cases, the registered businesses never become operational.

NATIONAL SOCIAL SECURITY FUND

118.
The National Social Security Fund (NSSF) is a fund set up to mobilize workers savings to be
paid out as retirement or disability-to-work benefits. The Fund currently carries out the following
activities:
i
ii
iii
iv

Registration of employers and their employees;

Payment of benefits to its retiring members;
Investment of surplus funds; and
Enforcement of the NSSF Act.

Employment Data Collected

119.
By use of the NSSF Act, the Fund receives annual contributions from employers engaging 5 or
more persons. These contributions cover both the employer and the employee. The following labour
statistics are therefore collected as a by-product of administering the Fund:
i
ii
iii
iv
v
vi

Number of employers and employees eligible for registration with the Fund;
Number of employers registered with the Fund - annually;
Number of employees registered with the Fund - annually;
Members paid out - annually;
Annual benefits paid out; and
Investments made by type of asset - annually.

120.
The NSSF compiles the National Social Security Fund Annual Report that contains, among
other information, membership contributions by age, and direction and size of investments, etc.
121.
In conclusion, the Directorate of Personnel Management and Teachers Service Commission
produce labour data on numbers and characteristics of civil service and teaching establishments,
respectively, as an administrative by-product using their respective nominal rolls. Data from the
nominal rolls are directly used to determine employees earnings and statutory deductions which
make the quality of civil service and teachers employment statistics to be unquestionably high. This is
particularly important in that Central Government and Teachers Service Commission employees
comprised 34.6 percent of total modern sector wage employment as of 1992 (see CBS, Economic
Survey 1993).
122.
Some labour data requirements go beyond the competence of the CBS e.g. those relating to
industrial relations which fall under the Ministry of Labour. Consequently, statistics on collective

28

bargaining, strikes, lockouts and time lost, and occupational accidents are produced and compiled by
the Ministry of Labour.
123.
In spite of the existence of many departments collecting labour data, information of vital
importance in manpower planning is either deficient or nonexistent altogether. These include
comprehensive data on skills needs, employment needs, and information on available occupational
skills.

DELAYS IN RELEASING LABOUR STATISTICS

124.
Considerable delays occur between completion of surveys and publication of results.
Sometimes results of surveys are never published. The impact of the results of a survey is seriously
eroded when such delays occur. Such delays are usually caused by the following factors: budgetary
constraints, staff shortage and turnover and inadequate computer time.
125.
CBS, like other Government departments, faces financial constraints. The department is
therefore unable to contract printing jobs commercially and is often unable to purchase items such as
paper and ink for its own press. Printing of publications outside CBS and the Government Press would
have considerably reduced the delay if funds were available to contract private printers. It is
appropriate to mention that cost overruns affect a survey at the data processing stage, leading to delays
in publication of the results.
126.
The Bureau experiences a high staff turnover. It is essential that a subject matter specialist
assigned a particular job takes it through from the design of the questionnaire to analysis and
preparation of final documents for publication. However, turnover of this category of workers is
unfortunately very high. This has inevitably resulted in delays in publication of results.
127.
The Government Computer Services (GCS) provides computer time to Government
departments and institutions. CBS is therefore forced to share and compete for computer time with
other Government departments. CBS work is given less priority to, say, the payroll. In such cases, CBS
work suffers, resulting to delays in publication of survey results. These delays could be reduced if
funds were available to contract for private computer time or to expand GCS so as to give CBS
uninterrupted computer time.
128.
Table 2 below gives an idea of delays involved in printing results of various labour surveys and
censuses. It should be emphasized that a period of about one year from completion of a survey to
publication of the results is considered normal. Any period in excess of one and half years is
considered excessive.
129.
It is evident that considerable delays occur between completion of surveys and their
publication. However, users are occasionally allowed access to the unpublished information at the
discretion of the CBS. To reduce the delays, it is recommended that:
a) Provision of microcomputers and training of professional officers in their use should be
stepped-up.
b) Finance, especially at the data processing stage of the survey process, should contribute
towards reduction of delays.

29

c) To accord survey continuity when an officer leaves, there should be a requirement that survey
knowledge be shared within a section or persons in the CBS.
d) To enhance survey and research capability of CBS, training should be expanded and officers
given wide exposure on survey methodology.
Table 2: Delays in Official Release of Recent Employment and Labour Force Surveys
NAME OF SURVEY/PUBLICATION

ISSUE

Employment and Earnings in the Modern

Sector

1985
1986
1987
1988
1989

DATE
COMPLETION
February 1986

National Manpower Survey

March 1987
March 1988
March 1989
March 1990
March 1988

Urban Labour Force Survey

Rural Labour Force Survey
Survey of Rural Non-Agricultural Enterprises
Labour Force Survey

January 1987
April 1989
April 1986
1977/78

OF

DATE OF PUBLICATION
July 1989
Not published
Not published
Not published
Not published
October 1988 (normal
period)
July 1988 (normal period)
June 1990 (normal period)
1989
Published in 1986

SOME ILLUSTRATIONS OF USES OF LABOUR DATA

130.
Labour data can be utilized in many ways including: (a) giving an insight to the dispersion of
wages in the country, (b) providing labour costs data needed for compilation of the national accounts,
and (c) creating employment profiles for the entire population. Data which allow analysis of wage
dispersion and wage trends are regularly gathered through the Annual Enumeration of Employees and
Self-Employed Persons. Similar information was also gathered by the National Manpower Survey of
1986-89. However, the data collected through the two surveys cover wages in the modern sector.
Wages in informal sector and in small farms are excluded. In addition, non-salary benefits e.g. cost of
rations, leave passages, bonus and gratuity payments, contribution to private provident funds, cost of
uniforms and medical benefits, are excluded.
COMPUTING LABOUR COMPONENT OF GDP
131.
The income approach to estimating GDP involves adding up the cost components of value
added for all producing establishments in the country. This constitutes the incomes paid out to
employees, indirect taxes, consumption of fixed capital, and the operating surplus.
Compensation of employees consists of:
a) Wages and salaries in cash and in kind.
b) Employers contributions to private employee welfare schemes for the account of their
employees.
c) Employers contributions to private pension funds, family allowances, health and other
employee benefits.

30

132.
In Kenya, it is not easy to get good data on compensation of employees. A notable shortcoming
of the data is that self-employed persons and unpaid family workers (in small farms, transport and
communications, and retail trade) are omitted from the category of employees. This leads to an
understatement of the labour statistics required for compilation of GDP. A more difficult variable to
capture is the operating surplus, which includes consumption of fixed capital (depreciation).
133.
Labour costs are a major component in the systems of national accounts. Information on
non-salary benefits relating to self-employed persons and unpaid family workers are practically
difficult to gather. The publication titled Sources and Methods used for the National Accounts of
Kenya (Central Bureau of Statistics, 1977) acknowledges problems involved in compiling labour data
needed for national accounts. For instance, no imputations are made for wages and salaries of
self-employed persons and unpaid family workers. Similarly, non-salary benefits are not imputed for
this category of workers which means that some labour costs are concealed in the gross operating
surplus component of the national accounts. Labour costs for mining and quarrying, large farms,
manufacturing, building and construction, electricity and water, and transport and communications
sectors, are based on the Annual Enumeration of Employees and Self-Employed Persons.
DISTRIBUTION OF WAGES: AN ILLUSTRATION
134.
The Statistical Abstract routinely reports the distribution of wages by categories of employees
(defined by earnings ranges) and by sectors. In calculating the Gini coefficients, one encounters three
basic problems with the data:
a) Since the average wage for each earnings group is not given, the mid-point is assumed to be
the average for each category. This is likely to understate the average for the lowest paid, as
the lowest salary income is assumed to be zero.
b) The highest paid group is defined as earning a minimum of Shs 6,000, which is also assumed to
be the mean in this study, thereby understating the earnings of the highest paid.
c) The data does not include non-salary employees benefits (e.g. house allowances and
education/medical benefits), which should be higher in the private sector (compared with,
say, the civil service) and for the higher income classes, thereby distorting the reported
benefits structure.
135.
If the smallest and largest observations are given the value of their nearest neighbours
(first-level symmetric Winsorization) while dealing with extreme values, the statistics (e.g. mean)
computed from the modified sample loses some efficiency in comparison with the true sample. The
second-level Winsorization refers to making two extreme values equal to their nearest neighbours,
and so on10. Using the lower bound of the top income group as the mean is equivalent to successive
see, W.J. Dixon, Simplified Estimation from Censored Normal Samples, Annals of Mathematical Statistics,
31(2), June 1960; John W. Tukey, The Future of Data Analysis, Annals of Mathematical Statistics, 33(1), March
1962; W.J. Dixon and John W. Tukey, Approximate Behavior of the Distribution of Winsorized t
(Trimming/Winsorization 2), Technometrics, 10(1), February 1968; and Wilfrid J. Dixon and Frank J. Massey,
Introduction to Statistical Analysis, fourth edition, McGraw-Hill, New York, 1983. Dixon (1960) attributed the
concept of Winsorization to Charles P. Winsor (1895-1951) who had suggested using for the magnitude of an
extreme, poorly known, or unknown observation the magnitude of the next largest (or smallest) observation;
while Tukey (1962) states that, when he first met Winsor in 1941 he had already developed a clear and
individual philosophy about the proper treatment of apparent wild shots and it was therefore appropriate to
attach Winsors name to the process of replacing certain of the most extreme of the observations in the sample by
the nearest unaffected values.
10

31

asymmetric Winsorization of the largest observations n-1 times, if the size of the group is n.
136.
To compute Gini coefficients using grouped data, we assume that the primary data on, say,
household incomes is arranged in a monotonically non-decreasing order before the data was
partitioned into groups. The main idea is that members of the first group are ranked first, those of the
second group second, and so on. It then follows that the resulting grouped data has to satisfy two
conditions. First, group means are arranged in a monotonic non-decreasing order. Second, a member
of a lower income group should not earn more than a member of a higher income group. When the
second condition is not satisfied, the grouped data is said to have a crossover effect. To compute Gini
coefficients using grouped data which has a crossover effect, one needs to know the distribution
functions for each group.
137.
An approximate method of computing the trapezoidal Gini coefficient using grouped data is
given by the formulas (see the National Manpower Survey 1986-88, p. 145):
Gini

1-Sum[Pz*{Sum(Ez + Ez-1)}], or

Gini

Sum[Qz*Ez+1] - Sum[Qz+1*Ez]

where Pz is the population share of the category in total, Qz is the cumulative population share, Ez is
the cumulated group earnings share, and where the income groups are ordered in an ascending order
from the poorest (z = 1) to the richest. With these caveats in mind, the distribution of wage earnings
has improved, with the Gini coefficient declining from 0.4942 in 1974, 0.4592 in 1982, 0.4216 in 1986,
and 0.4012 in 1988. A similar analysis of distribution of wage earnings is made using data from the
National Manpower Survey 1986-88 undertaken by the Ministry of Manpower Development and
Employment, which only covers modern sector employment. The Gini coefficient is derived as
0.4303, displaying greater inequality than for the labour market as a whole. Vandemoortele (1984) 11
found that, disregarding annual variations, improvement in distribution of wage earnings has been
continuous between 1964 and 1982.
138.

The upper bound Gini coefficient is given by the formula:

Gini

1 - 2{Sum[Pz*Ez-1)}

The lower-bound Gini coefficient assumes a trapezoidal Lorenz curve obtained by joining points
generated by cumulative population share (Pz) and cumulative group earnings share (Ez). The
upper-bound Gini distributes all income accruing to each group to one employee and the Lorenz curve
is therefore a series of rectangles. It is obvious that, in cases where the earnings categories are few, the
true Gini is likely to be closer to the lower-bound than the upper-bound Gini. For example, in the
case of distribution of wage earnings, the lower and upper bounds of the Gini coefficient are as in the
table below. Therefore, the approach used here understates the degree of inequality and can only be
used to measure trends, but is otherwise not useful for comparing income distribution across countries
unless the estimation procedures are clearly defined.

Jan Vandemoortele, The Wage Policy in Kenya: Past, Present and Future, Consultancy Report No. 12,
Institute for Development Studies, University of Nairobi, June 1984
11

32

Table 3: Gini Coefficients of Wage Concentration: Modern Sector

Lower bound

Upper bound

1974
1982
1986
1988

0.4942
0.4592
0.4216
0.4012

0.5947
0.5692
0.5445
0.5350

139.
For the upper income open ended income interval, Shs 6,000 and above, an alternative
formulation of the mean earnings can be computed by applying the Pareto formula:
Mean =

L[(V/(V-1)], and

(C-D)/(B-A)

Where:
L=
A=
B=
C=
D=

Lower limit of open end interval;

Logarithm of lower limit of interval preceding open end;
Logarithm of lower limit of open end interval;
Logarithm of the sum of the frequencies in the open end interval and the one
preceding it;
Logarithm of the frequency in the open end interval; and
The implicit mean earnings for the upper open ended group is independent of whether the
logarithms are natural or to base 10.

140.
As observed by Allen (1938) and Miller (1966) 12, this method of estimating the mean for the
upper open-ended interval is based on the observation by Vilfredo Pareto (1897) 13 that, for upper
income levels, a plot of the logarithm of persons with income greater than a given level of income
against the logarithm of income tends to yield a straight line, represented by Y=AX-V or Log Y = Log(A)
- V Log(X), where X is the income size, Y is the number of persons having that income or larger, and V
is the Pareto index which is a positive shape parameter. The Pareto procedure fits a Pareto distribution
to the high open-ended interval using the formula given in Allen (1938) and Miller (1966). Allen
(1938, page 408) observed that in practice the Pareto principle gives average income of about three
times the lower limit of the open-ended interval at least for large incomes. However, Leibenberg and

R. G. D. Allen, Mathematical Analysis for Economists, Macmillan and Co., Limited, London, 1938; and
Herman P. Miller, Income Distribution in the United States, U.S. Bureau of the Census, Government Printing
Office, Washington, D.C., 1966. See also, Lawrence R. Klein, An Introduction to Econometrics, Prentice-Hall,
Englewood Cliffs, 1962; Robert Nash Parker and Rudy Fenwick, The Pareto Curve and its Utility for
Open-Ended Income Distributions in Survey Research, Social Forces, 61(3), March 1983; and Joseph Persky,
Retrospectives: Paretos Law, Journal of Economic Perspectives, 6(2), Spring 1992.
13 Vilfredo Pareto, A Course in Political Economy, Rouge, Lausanne, Switzerland, 1897.
12

33

Kaitz (1951) 14 apply a parabolic density function to the first interval, straight-line density functions
for the middle intervals, and the Pareto curve for the upper classes. Lydall (1959) also notes that the
Pareto hypothesis has been strikingly successful in fitting the high tail of the distribution of
incomes15.
141.
This formulation gives rather high mean incomes of the upper open ended group, and
consequently unreliable Gini coefficients. The derived mean incomes for the upper open-ended group
are Shs 19,690 for 1982, Shs 19,037 for 1986 and Shs 15,676 for 1988, whereas one would expect the
mean to increase over time, holding the lower limit constant over the period under consideration. The
Gini coefficients derived with the redefined mean incomes for the upper open-ended groups are
0.5556 in 1974, 0.5848 in 1982, 0.5657 in 1986, and 0.5205 in 1988. The corresponding Gini coefficient
for the modern sector wage employment based on the 1986-88 National Manpower Survey was
0.4428. However, for the purpose of delineating trends in distribution of wage incomes it would be
more reliable to derive the mean for the upper open-ended group using the Pareto procedure rather
than the lower limit. For the lowest class bounded at the bottom by zero, actual earnings are likely to
cluster just below the upper limit of the group, and the group mean is therefore likely to be around 70
percent of the upper limit rather than the midpoint as indicated in the results above.
142.
Due to the few earnings categories defined in the official statistics and the assumption made
here that a categorys mean earnings is the mid-point of the range for the purpose of calculating group
earnings share in total wage earnings, the trend in the Gini coefficient should be interpreted with
caution. In addition, the few earnings categories (nine) imply that the Lorenz Curve is actually a
combination of straight lines. Assuming that any errors arising from the data inadequacy and
computational procedure are consistent over the period, the data at best indicates that the distribution
of wage earnings has become more equal. The estimation of the wage earnings Gini coefficient would
be much improved if the mean (or total) earnings for each category were known, and if the top
open-ended earnings category is further subdivided into, say, four income categories with redefined
earnings ranges.
143.
Wage dispersion has narrowed down at two levels: between the private and the public sector
and between the lowly and highly-paid employees. At the time of independence, the average wage for
the public sector exceeded that of the private sector by an estimated 60 percent, partly reflecting the
higher skill-intensity of the public sector (see Vandemoortele, 1984, for an illuminating analysis of the
subject). However, the public-private wage gap has generally been on the decline, if we ignore the
impact of the skill-intensity on the average wage. For example, during the period 1980-89, the
nominal private sector average wage increased by about 138 percent, compared with an increase of
128 percent for the public sector. At the same time, there has been a reduction in the earnings gap
between various categories of employees, hence the declining Gini coefficient of wage employment.
However, care should be taken in comparing average wage earnings in the private and public sectors.
14

Maurice Liebenberg and Hyman Kaitz, An Income Size Distribution from Income Tax and Survey Data,
1944, Studies in Income and Wealth, volume 13, National Bureau of Economic Research, 1951. See also, (i) John
C. H. Fei, Gustav Ranis, and Shirley W. Y. Kuo, Growth with Equity: The Taiwan Case, A World Bank Research
Publication, Oxford University Press, 1979; (ii) Joseph L. Gastwirth, The Estimation of the Lorenz Curve and
Gini Index, Review of Economics and Statistics, 54(3), August 1972; (iii) Emmett Spiers, Estimation of
Summary Measures of Income Size Distribution from Grouped Data, American Statistical Association,
Proceedings of the Social Statistics Section, 1977; and (iv) F. Nygard and A. Sandstrom, Measuring Income
Inequality, Almqvist & Wiksell International, Stockholm, Sweden, 1981, on interpolation methods for grouped
data.
15 H.T. Lydall, The Distribution of Employment Incomes, Econometrica, 27(1), January 1959.

34

As of 1988, no central Government employee was within earnings range Shs 0-699, which was the
earnings range of about 31 percent of total private sector employment. Wage dispersion in each sector
should be taken into account in comparing average earnings.
144.
The income ranges reported in the Statistical Abstract remained the same for the period
1980-1990, while the proportion of persons in each wage category has been shifting upwards from the
lower to the upper groups due to nominal wage adjustments16. The usefulness of data on earnings in
the modern sector would be enhanced if the income groups were increased and the mean of each
income group was given, or if the entire database was availed to outside users. The appropriate number
of groups and their wage ranges can be empirically determined through comparing Gini coefficients
from raw data with those of groups of varying wage ranges so as to minimize grouping errors. We have
tried to use the data to calculate indices of wage concentration (Gini coefficients) to illustrate the
limitations in the published grouped data.

EMPLOYMENT PROFILES, 1990-96

145.
The Kenya government has traditionally created employment profiles for the entire
population as an input to development planning process, beginning with the 1979-83 Development
Plan (see Table 4). The 1979-83 Plan combined both rural and urban areas, defined the working age
population in the range of 15-59 years, and assumed that the labour force participation rate was 85
percent. The Plan derived area-based estimate of man-hours in agriculture, and divided by 2,000 hours
to convert to equivalent man-years, thus transferring underemployment in agriculture to equivalent
open unemployment. This led to a high estimate of unemployment rate of 9.4 percent in 1976. The
1982/83 Report of the Presidential Committee on Employment (Table 5) and the 1984-88
Development Plan (Table 6) also created employment profiles based on the same assumptions as the
1979-83 Development Plan. The employment profile in the Sessional Paper No. of 1986 on Economic
Management for Renewed Growth (Table 7) was identical in methodology to the previous
employment profiles highlighted above.

16

Bhattacharya (1963) noted that when truncated distributions of different years are compared for inequality,
the points of truncation should be made equal in the real income sense, because differences in the point of
truncation may lead to fictitious differences in inequality. See, N. Bhattacharya, A Property of the Pareto
Distribution, Sankhya: The Indian Journal of Statistics, Series B, 25(3 & 4), December 1963.

35

Table 4: The Labour Force in Kenya (000)

1976
(Reported)
13,752
6,600
47.99

1978
(Estimate)
14,732
7,070
47.99

1983
(Target)
17,470
8,400
48.08

Labour force
Dependency ratio _1/
Labour force participation rates
(%)

5,610
1.08
85.00

6,000
1.08
84.87

7,140
1.08
85.00

Total employment
Modern sector
Small-scale agriculture
Pastoralists
Rural non-farm
Urban informal
Non-working labour force

5,085
915
2,665
390
990
125
525

Total population
Working age population (15-59)
(% of population)

%
100.00
17.99
52.41
7.67
19.47
2.46
9.36

5,460
1,000
2,810
410
1,100
140
540

%
100.00
18.32
51.47
7.51
20.15
2.56
9.00

6,585
1,250
3,210
470
1,460
195
555

%
100.00
18.98
48.75
7.14
22.17
2.96
7.77

_1/
Dependency ratio is defined as the ratio of under 15 and over 59 years to the working age
population aged 15 to 59.
Source: Kenya, Development Plan 1979-83

Table 5: The Labour Force in Kenya (000)

Total population
Working age population (15-59)
(% of population)
Labour force
Dependency ratio _1/
Labour force participation rates (%)

Total employment
Modern sector
Small-scale agriculture
Pastoralists
Rural non-farm
Urban informal
Labour force
Non-working labour force

1969
10,943
5,034
46.00

1976
13,847
6,439
46.50

3,808
5,473
1.17
1.15
75.65
85.00
1976
Number
%
5,085 100.00
915
17.99
2,665
52.41
390
7.67
990
19.47
125
2.46
5,473
388

7.09

1979
15,327
7,204
47.00

1981
16,514
7,762
47.00

6,123
6,598
1.13
1.13
84.99
85.00
1982
Number
%
6,108 100.00
1,126
18.43
3,122
51.11
457
7.48
1,222
20.01
181
2.96
6,849
741

10.82

Growth rate 1976-1982 (%)

3.10
3.52
2.67
2.68
3.57
6.36
3.81
11.39

_1/
Dependency ratio is defined as the ratio of under 15 and over 59 years, to the working age
population aged 15 to 59.
Source: Kenya, Report of the Presidential Committee on Unemployment, 1982/83, May 1983
(Chairman: Maina Wanjigi)

36

Table 6: Employment and Imputed Unemployment (000)

1976
13,847
7,288
52.63

1981
16,514
7,762
47.00

Labour force
Unemployment
(% of labour force)
Dependency ratio
Labour force participation rates (%)

5,473
388
7.09
0.90
75.10

6,598
690
10.46
1.13
85.00

Total employment
Modern wage sector
Small scale agriculture
Rural non-farm
Urban informal sector
Pastoralists

5,085
915
2,665
990
125
390

5,908
1,086
3,040
1,180
157
445

Total population
Working age population (15-59)
(% of population)

Source: Kenya, Development Plan 1984-88

Table 7: Employment Creation, 1984-2000 (000)
1984
Labour force
Unemployment
(% of labour force)
Total employment:
Modern wage sector
Non-wage agriculture
Rural non-farm
Urban informal sector

2000
7,500
980
13.07
6,520
1,150
3,860
1,310
200

14,000
2,850
20.36
11,150
2,060
6,490
2,250
350

Source: Sessional Paper No. 1 of 1986 on Economic Management for Renewed Growth
146.
The 1988 World Banks report on Employment and Growth in Kenya (Table 8 below) contains
an employment profile, which, unlike earlier efforts, used the information base contained in the
1977/78 Labour Force Survey (LFS). The World Bank assumed that rural open unemployment was
insignificant in 1985 and applied an urban unemployment rate of 15.9 percent based on the
preliminary results of the 1986 Urban Labour Force Survey (ULFS). Urban employment in agriculture
was estimated on the basis of the 1977/78 LFS, which reported 6.1 percent male and 28.7 percent
female employment was in urban agriculture. The urban informal sector was residually derived by
subtracting modern wage employment, employment in agriculture, and unemployment from the
urban labour force.
147.
Rural unemployment was assumed to be sufficiently low to be considered insignificant.
Modern wage employment was equally distributed between rural and urban areas and the rural
component split into large agricultural farms and non-agriculture, based on actual data from the
Annual Enumeration of Employees and Self-Employed Persons (CBS, Statistical Abstract, annual).
Total employment in agriculture was estimated from allocation of time based on the 1977/78 LFS, and

37

employment in smallholder, intermediate farms and pastoralists derived as a residual from modern
wage employment in large farms. Rural nonfarm employment was residually estimated.
148.
The 1989-93 Development Plan also included an employment profile (see Table 9 below), in
line with the World Banks methodology of separating rural from urban areas. The Plan assumed that
(a) in the rural areas, open unemployment was insignificant, and (b) the historical unemployment rate
of 16.2 percent of labour force in urban areas would remain the same during the 1989-93 Plan period.
The population and labour force projections for both rural and urban areas for reference year 1993
contained in the 1989-93 Development Plan are higher than recent estimates due to Kenyas recent
success in bringing down the rate of growth of population.
Table 8: The Labour Force and Employment in Kenya, 1985 (000)
Total population
Working age population (15-64)
(% of population)
Labour force
Unemployment
(% of labour force)
Dependency ratio
Labour force participation rates
Total employment:
Modern sector: Large farms
Modern sector: Non-agriculture
Urban informal sector
Smallholder, intermediate farms and pastoralists
Rural non-farm
Non-working labour force
(%)

Rural
16,582
7,288
43.95
6,183
0
0.00
1.28
84.84

Urban
3,659
2,190
59.85
1,487
236
15.87
0.67
67.90

Total
20,241
9,478
46.83
7,670
236
3.08
1.14
80.92

6,183
241
346
0
5,383
213
0
0.00

1,251
0
588
504
159
0
236
15.87

7,434
241
934
504
5,542
213
236
3.08

Source: World Bank, Employment and Growth in Kenya: A World Bank Economic Report, Eastern
Africa Department, Washington D.C., 1988

38

Table 9: Population, Labour Force and Employment in Kenya, 1988 (000)

Total population
Working age population (15-64)
(% of population)
Labour force
Unemployment
(% of labour force)
Dependency ratio
Labour force participation rates
Total employment:
Modern sector: Public
Modern sector: Private
Modern sector: Self-employment
Urban informal sector
Small farms
Rural non-farm
Non-working labour force
(%)

Rural
18,698
7,288
38.98
6,933
0
0.00
1.57
95.13

Urban
3,959
2,190
55.32
1,623
258
15.90
0.81
74.11

Total
22,657
9,478
41.83
8,556
258
3.02
1.39
90.27

6,933
217
226
0
0
6,055
435

1,365
443
440
41
441
0
0

8,298
660
666
41
441
6,055
435

0
0.00

258
15.90

258
3.02

Source: Kenya, Development Plan 1989-93

149.
To create employment profiles for the period 1994-96, the entire population is divided
between rural and urban, using population census data and population projections for inter-census
years. The rural and urban populations are further subdivided into those of working age and those not
of working age. In Kenya, the rural working age population is defined to be eight years of age and
above, and 15-64 years for the urban population. The working age population is divided into persons
who are part of the labour force (or economically active) and those who are inactive. Those not in the
labour force includes housewives, students at school fulltime, retirees, and those unable to work
through, say, illness. The participation rate is the proportion of working age population who are in the
labour force.
150.
The population projections used here have been computed by the Long Range Planning
Division, Ministry of Planning and National Development. The underlying assumptions are:
a) The fertility rate between 1993 and 1996 is declining at constant rates of 1.5 percent per
annum for both rural and urban areas combined, 1.3 percent for rural areas and 1.9 percent for
urban areas.
b) Other things being equal, the death rate of the population per annum is constant, varying only
by location. When the AIDS variable is incorporated in the population, the death rates per
annum increase, and the increase varies with location. The death rates per annum reported in
Table 10 are increasing as a result of the AIDS component. The increases in the projected
death rates for rural and urban areas combined are 2.3 percent, 2.7 percent and 2.9 percent in
1994, 1995 and 1996, respectively. The corresponding rates for the rural areas are 1.0 percent,
1.1 percent and 1.3 percent; and for the urban areas are 7.1 percent, 7.3 percent and 7.1
percent.

39

c) New HIV positive cases are assumed to increase at an annual rate of 5.6 percent between 1993
and 1996.
151.
The following table gives a summary of the assumptions upon which the above projections are
based. These assumptions are in relation to fertility and mortality rate variables.
Table 10: The Assumptions Underlying Population Projections
VARIABLE
Fertility Rate
Rural
Urban
Total
Crude Death Rate
Rural
Urban
Total
HIV Positive (000)
Total
New Positive
AIDS Deaths (000)
Cumulative
Current

1993

1994

1995

1996

6.737
4.165
6.229

6.650
4.085
6.133

6.563
4.007
6.039

6.477
3.931
5.946

14.17
16.69
14.66

14.27
17.87
14.99

14.42
19.18
15.39

14.61
20.55
15.84

842
190

989
206

1134
216

1270
222

125
0 44

182
0 57

253
0 71

339
0.87

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993
Table 11: Population and Labour Force Projections (000)
Population
Labour Force
Unemployment
Rural
Urban
Rural
Urban
Rural
Urban
1989
18,100
3,956
7,213
1,844
241
298
1990
18,603
4,174
7,430
1,956
247
316
1991
19,106
4,399
7,650
2,069
253
333
1992
19,604
4,631
7,874
2,183
259
349
1993
20,095
4,873
8,098
2,302
266
368
1994
20,580
5,123
8,321
2,428
273
388
1995
21,058
5,381
8,550
2,557
281
410
1996
21,529
5,647
8,782
2,687
290
434
1997
21,993
5,920
9,015
2,822
300
459

Unemployment (%)
Rural
Urban
3.34
16.16
3.32
16.16
3.31
16.09
3.29
15.99
3.28
15.99
3.28
15.98
3.29
16.03
3.30
16.15
3.33
16.27

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993
152.
Results of the 1986 Urban Labour Force Survey show that 70.4 percent of the total working
age population are in the labour force, while the 1988-89 Rural Labour Force Survey shows that
almost everyone in the rural areas work, i.e. almost no one in the rural areas is openly unemployed.
Urban unemployment was 16 percent of the labour force or 59 percent of the working age population.
However, the projections have roughly assumed the level of urban unemployment based on the 1986
ULFS, but has included a 3.3 percent rural open unemployment. This is a realistic assumption given
the existence of landless labourers who might not be in paid employment, and do not have agricultural
holdings of their own.

40

153.

Data on total modern sector employment for private and public sectors is computed from the
Annual Enumeration of Employees and Self-Employed Persons and returns from the Teachers Service
Commission and the Directorate of Personnel Management. Total rural employment is computed
from labour force and statistics on rural unemployment rates. The distribution of rural modern sector
employment assumes that all agriculture and forestry workers are rural-based, while rural modern
non-agriculture sector is the net of total rural modern sector as given in the Statistical Abstract less
those engaged in agriculture and forestry. The balance of rural employment is assumed to be engaged
in smallholder farming (on own holdings or for pay) and the rural nonfarm. Using the results of the
1988/89 Rural Labour Force Survey, the labour allocation to agricultural activities (crop, livestock, and
labour on other farms) by the working age population in the age group 15-64 years were 17 hours out
of 26.6 hours per week (excluding time allocated to firewood and water collection). These ratios were
used to calculate labour allocation to agriculture, while time spent on small farms was computed as a
residual of total labour allocation to agriculture less modern sector agricultural employment. It should
be noted that using the main occupation rather than hours worked would give different estimates of
labour allocation between farm and nonfarm activities.
154.
The rural nonfarm employment can be determined from the results of the 1981/82 Rural
Household Budget Survey (RHBS) or the 1988-89 Rural Labour Force Survey (RLFS). The RHBS
shows that nonfarm enterprise was the main source of income for an estimated 9.9 percent of the rural
household population. Since all members of the households included would not be engaged in
nonfarm enterprise and the returns from each activity are not proportional to time spent, this
methodology is likely to overestimate the contribution of nonfarm enterprise to total employment.
The use of RLFS data is also laden with definitional problems. However, if we restrict ourselves to
nonfarm profit-making, then the hours spent on nonfarm enterprise as proportion of time spent on all
rural economic activities would 7.7 percent for the 8-64 years age range and 6.6 percent for all rural
population of eight years of age and above. The latter methodology is more appropriate, although it is
not a proxy for rural nonfarm employment but time spent by the rural labour force on nonfarm
profit-making activities.
155.
The urban modern sector self-employed are determined as part of the questionnaire of Annual
Enumeration of Employees and Self-Employed Persons (Excluding Domestic Servants). Total urban
unemployment is determined by applying unemployment rate (16 percent of the labour force). The
1986 ULFS estimates that 8.6 percent of urban labour force time is spent on agricultural activities,
reflecting the large areas of a generally rural character located on the fringes of many urban areas. The
latter category would also include some urban employment in the modern sector and the informal
sector working part-time on their urban agricultural holdings. The urban informal sector is derived
residually by netting out urban modern sector employment, urban agriculture and the unemployed
from the urban labour force. The estimates of the urban informal sector employment presented in this
paper are about two thirds over and above the official estimates (see CBS, Economic Survey 1993).

41

Table 12: The Labour Force and Employment in Kenya, 1990-96 (000)

Total population
Labour force
Unemployment
(% of labour force)
Total employment:
Modern sector: Agriculture
Modern
sector:
Non-agriculture
Urban informal sector
Smallholder, intermediate
farms and pastoralists
Rural non-farm
Contribution (%)
Total employment:
Modern sector: Agriculture
Modern
sector:
Non-agriculture
Urban informal sector
Smallholder, intermediate
farms and pastoralists
Rural non-farm

Rural
18,603
7,430

1990
Urban
4,174
1,956

Total
22,777
9,386

Rural
20,095
8,098

1993
Urban
4,873
2,302

Total
24,968
10,400

Rural
21,529
8,782

1996
Urban
5,647
2,687

Total
27,176
11,469

247
3.32
7,183
270
410

316
16.16
1,640
0
734

563
6.00
8,824
270
1,144

266
3.28
7,832
288
510

368
15.99
1,934
0
789

634
6.10
9,766
288
1,299

290
3.30
8,492
308
634

434
16.15
2,253
0
847

724
6.31
10,745
308
1,481

0
4,834

765
141

765
4,975

0
5,277

1,004
141

1,004
5,418

0
5,726

1,265
141

1,265
5,867

1,670

1,670

1,757

1,757

1,824

1,824

100.00
3.76
5.71

100.00
0.00
44.76

100.00
3.06
12.96

100.00
3.68
6.51

100.00
0.00
40.80

100.00
2.95
13.30

100.00
3.63
7.47

100.00
0.00
37.59

100.00
2.87
13.78

0.00
67.30

46.65
8.60

8.67
56.38

0.00
67.38

51.91
7.29

10.28
55.48

0.00
67.43

56.15
6.26

11.77
54.60

23.25

0.00

18.93

22.43

0.00

17.99

21.48

0.00

16.98

Source: Own estimates

Note: The published version of the Development Plan 1994-96 assumed that urban unemployment
rate would increase from 16.2 percent in 1990 to 17.8 percent in 1993 and 16.8 percent in 1996, which
affected the estimates for urban informal sector employment.

SUMMARY AND CONCLUSION

156.
Employment data on the modern sector are collected through LE survey and nominal TSC and
central Government rolls on an annual basis. Despite the low response rate in the LE survey, the
sectoral composition of employment is fairly reliable. Employment and earnings data on civil service
and teachers are probably the most reliable as they are collected directly from their respective nominal
rolls. Data on domestic servants is underestimated due to an inappropriate frame. Information on
informal sector enterprises is collected in urban areas through an annual sample survey. Although the
aggregate figures are unreliable, they are likely to give a fair representation of the sectoral breakdown
of informal sector activities. A survey of rural non-agricultural enterprises was conducted in 1985, but
its usefulness is more in characteristics of these activities, rather than in their aggregate contribution
to employment. In addition, the survey did not adequately capture household-based nonfarm
activities. In general, the labour data generated by the Government gives a fairly good base, especially
of the industrial occupations of wage employment. It also gives a fairly accurate picture of growth
rates in modern employment, both by sectors and in the aggregate, as estimation problems appears
consistent over time. However, the maintenance of an accurate record of firms is rather difficult,
especially for the small firms where the rate of entry and exit is expected to be high.

42

157.
Labour force surveys were recently conducted for urban (1986) and rural (1988/89) areas. The
surveys give useful parameters (e.g. participation rates and unemployment rates) which are useful in
mapping out employment profiles for the entire population. Since labour force surveys and household
budget surveys collect data from households, they normally give better estimates of employment
levels than enterprise-based/payroll surveys and also offer a supply-side complement to labour
statistics gathered from employers.
158.
There are various Government agencies involved in collection of labour data. However, the
proliferation of institutions concomitantly diverts CBS staff time to help the other Government
departments, and is also not conducive to raising the skills levels in CBS. CBS does not have adequate
financial allocations to undertake major surveys, and it would be useful to concentrate resources
rather than spread them thinly over many institutions.
159.
The Government should reduce the budget devoted to economic analysis in the Ministry of
Planning and National Development headquarters and transfer the resources (personnel and financial
resources) to cater for the creation of a reliable and timely database at the Central Bureau of Statistics.
It is futile for the Ministrys staff to spend time and resources in the construction of elegant economic
models grounded on shaky economic data. In addition, it is recommended that a closer link between
CBS/Ministry of Planning and National Development and local and foreign universities would reduce
the analytical burden on the Ministrys staff. It should be recalled that research papers written using
Governments economic database provided the intellectual underpinning of economic planning in the
1960s and 1970s. The link between Government planning machinery and scholars assisted the
Government in the planning process and was also an intellectual boost to the university scholars.
160.
The creation of an employment profile confronts at least five major problems. First, there is no
single year when all the surveys were conducted at the same time. Second, there is some
under-coverage of the modern sector due to non-response and the comprehensiveness of the Master
File. Third, employment data for some sectors e.g. rural nonfarm and small farms are not covered, and
can only be derived either indirectly through labour force surveys (e.g. nonfarm) or residually (e.g.
small farms). Fourth, as illustrated by the distinction between small farms and rural nonfarm, there are
definition problems. In case of the rural sector, it is not clear whether marketing and fetching of water
and firewood are nonfarm. In this paper, these activities are excluded in small farms while rural
nonfarm is restricted to nonfarm profit-making activities. Fifth, the employment profile combines
both notions of fulltime employment (e.g. in the modern sector) and allocation of time to different
economic activities (e.g. in the rural areas). In other words, the employment profile combines two sets
of definitions: (a) definitions that guide the official classification of employment data routinely
collected by CBS (based on persons by main economic activity), and (b) definitions used in labour
surveys (based on hours per economic activity).
161.
There is need to review the extent to which certain categories of the employed are omitted
from all CBS employment surveys due to definitional problems. For example, the 1988 World Bank
economic report on Employment and Growth in Kenya states that all CBS employment-specific
surveys omit (a) urban enterprises with a fixed location and permanent structures which are not
registered, and (b) rural enterprises which are not registered, have a fixed location and have more than
ten persons engaged in the business. The enterprises omitted from the CBS surveys affect the
reliability of overall magnitudes of employment by sector, as well as the sectoral breakdown of
employment.

43

TERMS OF REFERENCE
KENYA: EMPLOYMENT PROFILE AND PROJECTIONS FOR PERIOD 1993- 96
1.
The Central Bureau of Statistics (CBS) of the Office of the Vice President and Ministry of
Planning and National Development, in conjunction with the Ministry of Labour and Manpower
Development, is seeking a consultant to prepare a background paper on employment in Kenya as an
input to the Development Plan for 1994-96. The purpose of the consultancy is to evaluate the coverage
of labour statistics generated by the Government Ministries and other official agencies. The aim is to
reconcile various sources of data on employment, create an employment profile for the base period
1992, do projections on the employment profile to cover the Plan period, and recommend possible
improvements in the coverage and quality of data.
2.
The focus should be on the usefulness of the existing database in terms of coverage, focusing
on both employment and earnings. The analysis is expected to cover the modern sector, the
agricultural sector, Government and the informal sector. For example, what employment and earnings
data are collected directly and which numbers are residuals and what are they residuals of, and what is
the implications on the margin of error of the residuals, and the implications for employment,
earnings and value added for the residual sectors?
3.
The consultant will be required to describe the various datasets: (a) what they measure, (b)
completeness, (c) length of series (if there is a series), (d) coverage (has it changed?), and (e) how good
is the dataset (for what?). In addition, the consultant will evaluate how comprehensive the datasets are
when taken together, and what one must do to get a comprehensive picture at any given date. For
example, there may be need for better data on rural and urban informal sectors.
4.

It would be useful to consider:

a) A rundown of definitions used in the official documents on labor statistics, and the
implications of definitions used on the quality of data collected.
b) Discussion of the coverage of each official document.
c) The issue of labor costs (as a combined effect of employment and average earnings) and the
assumptions made in computing labor costs for sectoral and total Gross Domestic Product
(GDP).
d) The additional information provided by the occasional Labour Force Surveys, what they
include that is not part of the annual surveys, and whether they lead to future refinements in
regular data collection.
e) The adequacy of wage employment data for computing reasonable estimates of wage
dispersion in the private and public sectors, separately and combined; and the relative
reliability of private and public sector employment and earnings statistics.
f) The agencies/ministries engaged in data collection and how they relate to each other, and
possible discrepancies in data collected. A case in point is the National Manpower Survey
1986-88 and the extent to which the data corresponds to those of CBS.

44

g) The normal delays in releasing labor statistics, both from regular and occasional surveys,
giving reasons for the delays (e.g. lack of computerization culture? manpower? administrative?
budgetary constraints?) and possible solutions.
5.

The recommendations should include:

a) Possible changes in working definitions to improve data usefulness and to conform to
international practice (in cases where there might be definitional discrepancies);
b) The required improvements in primary data gathering to reduce the estimation for labor costs
component of GDP;
c) The required improvements in data collection, especially for the rural (farm and off-farm) and
for the urban small-scale and the informal sector, pointing out to the increase in the usefulness
of such data for policy analysis;
d) New surveys that could be useful to fill gaps in labor statistics; and
e) The necessary institutional changes to facilitate collection and use of labor statistics by the
Government.

DELIVERABLES
6.
The consultant will produce two reports, a technical report fulfilling the terms of reference as
set out above; and a nontechnical version in line with the proposed chapter on employment for the
Development Plan 1994-96.

TERMS OF REFERENCE
KENYA: STRUCTURAL CHANGE IN THE KENYAN ECONOMY17
1.
The Central Bureau of Statistics (CBS) of the Office of the Vice President and Ministry of
Planning and National Development, is seeking a consultant to prepare a background paper on
Kenyas past pattern of development and projections for the next three years as an input to the
Development Plan for 1994-96. The purpose of the consultancy is to evaluate Kenyas past economic
performance since 1972, giving identifiable development episodes, and how the policy makers reacted
to those developments. The consultant will also be expected to carry out projections of various
macroeconomic aggregates for the Plan period 1994-96, using acceptable economic methodology.
2.
In delineating past trends, the consultant is expected to focus on macroeconomic aggregates
such as growth of Gross Domestic Product (GDP), sectoral performance, savings, investment, public
17

The contribution of the Central Bureau of Statistics towards the Development Plan for the period 1994-96
included employment profiles and structural change in the Kenyan economy. These terms of reference are
reproduced to show the pattern of thinking that informed that contribution, although the report on structural
change was undertaken by another consultant.

45

finance (taxation, expenditure, internal and external borrowing), developments in the social sectors
(e.g. health and education), and in changes in measures of consumer welfare and income distribution.
3.

It would be useful to consider:

a) The effect of rebasing the data (e.g. national accounts, public finance and balance of payments
statistics) during the period 1972-92 that may affect the comparability of data over the period;
b) Changes in productivity e.g. sectoral and global incremental capital output ratios (ICORs) and
possible explanations for changes in productivity over time;
c) The structural changes in the Kenyan economy over time using macroeconomic data
generated by the Central Bureau of Statistics, and the necessary data that need to be collected
to enable better measures of structural change in the Kenyan economy;
d) The projections for major macroeconomic aggregates for the Plan period 1994-96, using 1992
as the base year. Sufficient notes should be provided to justify the projections in the
consultants report.

DELIVERABLES
4.
The consultant will produce two reports, a technical report fulfilling the terms of reference as
set out above; and a nontechnical version in line with the proposed chapter on Patterns of
Development 1972-92 and Projections for the Development Plan period 1994-96.

46

STATISTICAL ANNEX
Annex Table 1: Unemployment Rates by Age and Sex, 1977/78 and 1986 (%)
Age Group

Definition A

Definition C

1978

1986

1978

1986

32.2
22.2
5.6
1.9
1.8
0.7
1.1
1.3
0.2
3.1
2.2
6.2

30.5
21.3
5.1
3.0
1.1
0.4
2.9
2.8
4.9
NA
NA
5.9

34.3
23.9
6.1
2.1
1.9
0.8
1.2
1.5
0.2
3.4
2.5
6.8

70.9
39.0
12.9
5.6
5.8
2.2
6.2
4.8
12.2
NA
NA
14.8

21.0
11.4
2.9
1.7
1.4
0.2
0.4
0.0
1.6
0.0
0.8
5.9

22.6
22.6
7.9
4.1
4.0
4.3
5.0
5.1
0.0
NA
NA
10.0

22.6
12.4
3.2
1.8
1.5
0.3
0.4
0.0
1.7
0.0
0.9
6.4

46.3
51.0
28.2
19.3
14.4
9.7
6.3
7.3
43.3
NA
NA
29.5

24.7
17.1
4.4
1.8
1.6
0.7
1.0
1.3
1.3
3.0
2.0
6.1

24.7
21.8
6.2
3.3
2.0
1.2
3.4
3.2
3.2
NA
NA
7.2

26.6
18.5
4.8
2.0
1.8
0.7
1.1
1.4
1.4
3.2
2.2
6.7

55.7
44.2
19.1
10.6
8.6
22.0
6.2
5.3
5.3
NA
NA
20.2

MALES
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
SUB-TOTAL
FEMALES
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
SUB-TOTAL
TOTAL
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
TOTAL

Source: Long Range Planning Division, Ministry of Planning and National Development

47

Annex Table 2: Participation Rates by Age and Sex, 1977/78 and 1986 (%)
Age Group

Definition A

Definition C

1978

1986

1978

1986

23.2
78.6
93.0
97.0
98.6
97.9
97.9
89.5
90.8
86.7
60.8
83.2

10.4
61.8
88.7
96.4
94.3
96.0
96.0
94.5
82.2
74.0
NA
77.0

23.9
80.3
93.5
97.2
98.8
98.4
98.0
89.6
90.8
87.0
60.9
83.7

24.8
79.8
96.6
99.4
99.0
99.4
99.4
96.5
89.0
74.0
NA
85.1

22.5
37.5
47.3
44.0
40.0
39.1
47.7
44.1
34.5
30.8
35.0
38.5

24.8
38.2
57.6
57.5
55.8
60.7
59.4
52.1
27.3
47.5
NA
46.9

23.0
37.9
47.4
44.1
40.1
39.1
47.7
44.1
34.5
30.8
35.0
38.8

35.7
60.3
73.9
68.2
62.6
64.3
60.2
53.4
48.1
47.5
NA
59.8

NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA

18.0
49.9
74.0
79.2
77.7
86.4
84.0
81.2
63.1
60.9
NA
63.4

NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA

30.6
70.0
85.8
85.6
83.3
88.7
86.6
83.0
74.8
60.9
NA
73.7

MALES
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
SUB-TOTAL
FEMALES
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
SUB-TOTAL
TOTAL
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
TOTAL

Source: Long Range Planning Division, Ministry of Planning and National Development

48

Annex Table 3: 1988/89 Unemployment Rates by Age and Sex (%)

Age-Group
8-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
15-64
TOTAL

Males

Females

Total

0.0
1.1
5.1
3.5
1.1
0.3
0.4
0.8
0.0
0.0
0.4
0.1
1.5
1.0

0.0
0.1
1.2
0.3
0.2
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.2
0.2

0.0
0.6
2.9
1.4
0.6
0.1
0.2
0.3
0.0
0.0
0.2
0.1
0.8
0.6

Source: 1988/89 Rural labour Force Survey

Annex Table 4: 1988/89 Labour Force Participation Rates by Sex and Age: Both Phases (%)

Age-Group
8-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
15-64
TOTAL

Phase I
Females

Males
58.4
62.9
80.6
89.3
93.9
96.2
95.5
93.7
94.7
95.9
96.0
85.5
83.9
75.3

Total
63.2
73.9
89.2
92.6
93.9
94.3
90.9
93.2
94.2
93.4
89.2
76.9
88.5
80.5

Males
60.7
68.1
85.3
91.4
93.9
95.1
93.0
93.4
94.4
94.6
92.6
81.3
86.4
78.0

Source: 1988/89 Rural labour Force Survey

49

Phase II
Females
48.3
50.8
76.0
89.3
96.3
95.8
97.8
98.5
95.5
97.2
95.7
86.4
81.2
69.8

Total
56.1
68.4
88.9
95.4
95.2
95.6
94.8
96.4
94.2
96.7
95.1
81.2
89.6
79.1

52.1
58.9
83.4
93.2
95.6
95.7
96.0
97.3
94.8
96.9
95.4
83.9
85.8
74.7

Annex Table 5: 1993 POPULATION PROJECTIONS (000)

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Rural
Female
420
1,512
1,800
1,555
1,175
730
641
573
435
374
304
254
193
164
133
78
86
10,428

Male
434
1,550
1,867
1,606
1,208
643
417
400
325
312
226
181
156
128
100
51
62
9,667

Total
854
3,061
3,667
3,161
2,384
1,373
1,058
973
760
686
530
436
349
292
234
129
148
20,095

Urban
Female

Male

92
277
252
195
261
284
264
180
112
81
47
32
18
13
8
4
5
2,127

95
288
252
178
218
376
406
299
213
168
109
67
39
19
10
4
3
2,746

Total
187
565
504
373
480
660
670
479
326
250
156
99
57
32
18
8
8
4,873

Total
Female
512
1,789
2,052
1,750
1,437
1,014
905
753
547
456
351
286
211
177
141
82
91
12,555

Male

Total

529
1,837
2,119
1,784
1,427
1,019
823
699
538
480
335
249
195
147
111
55
66
12,413

1,041
3,626
4,171
3,534
2,863
2,033
1,728
1,452
1,086
936
686
535
406
324
252
137
156
24,968

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

Annex Table 6: 1993 LABOUR FORCE PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
0
0
0
487
591
570
613
555
426
361
296
246
163
131
76
0
0
4,516

Urban
Male
0
0
0
509
500
441
391
391
318
307
219
168
152
111
74
0
0
3,582

Total
0
0
0
996
1,091
1,011
1,004
946
744
667
515
414
316
242
150
0
0
8,098

Total

Female

Male

0
0
0
0
83
153
184
116
69
49
28
17
8
6
0
0
0
712

0
0
0
0
43
277
383
295
206
168
106
64
33
14
0
0
0
1,590

Total
0
0
0
0
126
430
567
411
274
216
134
81
42
20
0
0
0
2,302

Female
0
0
0
487
674
723
796
671
495
409
324
263
172
137
76
0
0
5,229

Male

Total

0
0
0
509
543
718
774
686
523
474
325
232
186
125
74
0
0
5,171

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

50

0
0
0
996
1,217
1,441
1,570
1,357
1,019
884
650
495
358
263
150
0
0
10,400

Annex Table 7: 1993 UNEMPLOYMENT PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female

Urban
Male

0
0
0
0
18
61
51
34
13
14
7
6
1
1
0
0
0
207

Total
0
0
0
0
6
28
15
5
1
2
2
0
0
0
0
0
0
58

Total

Female
0
0
0
0
24
89
66
40
14
16
9
6
1
1
00
0
0
266

Male

0
0
0
0
36
61
52
17
4
1
2
2
1
0
0
0
0
175

Total
0
0
0
0
26
88
51
13
3
4
4
3
1
0
0
0
0
192

Female
0
0
0
0
61
148
102
30
5
5
6
5
2
1
0
0
0
368

Male

0
0
0
0
54
122
102
52
15
15
9
8
3
2
0
0
0
383

Total
0
0
0
0
32
115
65
18
5
5
6
3
1
1
0
0
0
251

0
0
0
0
86
237
168
70
21
21
15
11
4
2
0
0
633

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

Annex Table 8: 1994 POPULATION PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
426
1,536
1,823
1,591
1,248
746
648
588
454
381
315
261
200
164
137
81
85
10,683

Urban
Male
441
1,573
1,886
1,654
1,278
678
404
417
319
320
235
186
159
129
104
54
61
9,897

Total
867
3,110
3,709
3,245
2,526
1,424
1,051
1,005
773
701
550
447
359
293
241
135
146
20,580

Total

Female

Male

96
295
256
208
268
313
269
195
116
90
48
36
18
13
8
5
5
2,238

99
305
256
191
225
397
437
303
228
174
118
71
42
20
11
4
3
2,885

Total
194
600
512
399
494
711
706
499
343
264
166
107
59
33
19
9
8
5,123

Female
522
1,831
2,079
1,799
1,516
1,060
916
783
569
471
363
297
217
177
145
86
90
12,921

Male

Total

539
1,878
2,142
1,845
1,504
1,075
841
721
547
494
353
257
201
148
115
58
64
12,782

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

51

1,061
3,709
4,221
3,644
3,020
2,135
1,757
1,504
1,116
965
716
554
418
326
260
144
154
25,703

Annex Table 9: 1994 LABOUR FORCE PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
0
0
0
498
628
583
619
570
444
367
306
253
169
131
79
0
0
4,646

Urban
Male

Total

0
0
0
524
529
465
379
407
312
315
228
172
155
112
76
0
0
3,675

Total

Female

0
0
0
1,022
1,157
1,048
998
978
757
682
534
425
324
243
155
0
0
8,321

Male

0
0
0
0
85
168
186
125
71
54
29
19
8
6
0
0
0
753

Total

0
0
0
0
44
293
413
300
219
173
115
68
35
15
0
0
0
1,675

Female

0
0
0
0
130
461
600
425
290
227
144
87
44
21
0
0
0
2,428

0
0
0
498
713
751
805
696
515
421
335
272
177
137
79
0
0
5,399

Male

Total

0
0
0
524
573
758
792
707
532
488
343
240
191
127
76
0
0
5,350

0
0
0
1,022
1,286
1,509
1,597
1,403
1,047
908
678
512
368
264
155
0
0
10,749

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

Annex Table 10: 1994 UNEMPLOYMENT PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
0
0
0
0
19
62
51
35
13
14
8
6
1
1
0
0
0
213

Urban
Male

Total
0
0
0
0
6
29
14
5
1
2
2
0
0
0
0
0
0
60

Total

Female
0
00
0
0
26
92
66
41
14
16
9
6
1
1
0
0
0
273

Male

0
0
0
0
37
67
52
19
4
1
2
2
1
0
0
0
0
185

Total
0
0
0
0
27
93
55
13
4
4
4
3
1
0
0
0
0
203

Female
0
0
0
0
63
159
107
32
7
5
6
6
3
1
0
0
0
388

0
0
0
0
56
129
104
54
17
16
9
9
3
2
0
0
0
398

Male

Total
0
0
0
0
33
122
69
18
4
6
6
3
1
1
0
0
0
263

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

52

0
0
0
89
251
173
73
21
21
15
12
4
2
0
0
0
661

Annex Table 11: 1995 POPULATION PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
433
1,557
1,841
1,635
1,305
780
652
598
475
387
326
267
208
164
139
85
85
10,937

Urban
Male
448
1,595
1,898
1,708
1,340
716
402
424
319
322
246
191
161
131
105
58
59
10,121

Total
881
3,152
3,739
3,342
2,645
1,496
1,054
1,022
794
708
572
457
369
295
244
144
144
21,058

Total

Female

Male

99
306
268
219
278
344
272
208
122
96
50
39
18
14
8
5
5
2,352

Total

103
316
269
203
234
425
461
312
243
178
128
75
44
21
11
4
3
3,029

202
622
537
422
512
769
733
520
365
274
178
115
62
35
20
9
8
5,381

Female
532
1,863
2,110
1,854
1,583
1,124
924
806
597
483
376
306
226
178
147
90
90
13,289

Male

Total

550
1,911
2,166
1,910
1,574
1,141
863
735
562
499
373
266
205
151
117
63
63
13,150

1,082
3,774
4,276
3,764
3,157
2,265
1,788
1,541
1,159
982
750
572
431
330
264
153
153
26,439

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

Annex Table 12: 1995 LABOUR FORCE PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
0
0
0
512
656
609
624
580
465
373
317
258
176
131
80
0
0
4,780

Urban
Male
0
0
0
541
555
491
377
414
312
316
239
177
158
114
77
0
0
3,770

Total
0
0
0
1,053
1,211
1,100
1,001
993
777
689
556
435
333
245
157
0
0
8,550

Total

Female

Male

0
0
0
0
88
185
189
134
75
58
30
21
9
7
0
0
0
794

0
0
0
0
46
313
436
308
234
177
124
72
37
15
0
0
0
1,762

Total
0
0
0
0
134
498
625
442
309
234
155
93
46
22
0
0
0
2,557

Female
0
0
0
512
745
794
812
714
540
430
347
279
184
138
80
0
0
5,574

Male

Total

0
0
0
541
601
804
813
721
546
493
363
249
195
129
77
0
0
5,532

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

53

0
0
0
1,053
1,345
1,598
1,625
1,435
1,086
923
710
528
379
267
157
0
0
11,107

Annex Table 13: 1995 UNEMPLOYMENT PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female

Urban
Male

0
0
0
0
20
65
52
36
14
15
8
6
1
1
0
0
0
219

Total
0
0
0
0
7
31
14
5
1
2
2
0
0
0
0
0
0
62

Total

Female
0
0
0
0
27
96
66
41
15
16
10
6
1
2
0
0
0
281

Male

0
0
0
0
38
73
53
20
4
1
2
3
1
1
0
0
0
196

Total
0
0
0
0
28
99
58
14
4
4
5
3
1
0
0
0
0
215

Female
0
0
0
0
65
172
111
33
8
5
6
6
3
1
0
0
0
410

Male

0
0
0
0
58
138
105
56
18
16
10
9
3
2
0
0
0
414

Total
0
0
0
0
34
130
72
19
5
6
7
3
1
1
0
0
0
277

0
0
0
0
92
268
177
75
23
22
16
12
4
2
0
0
0
691

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

Annex Table 14: 1996 POPULATION PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
441
1,580
1,853
1,682
1,348
832
654
603
499
391
338
271
218
165
139
90
85
11,189

Urban
Male
455
1,618
1,904
1,762
1,393
758
411
419
325
317
259
196
163
133
105
63
58
10,340

Total
896
3,198
3,757
3,444
2,741
1,591
1,065
1,022
824
708
597
467
381
298
244
154
144
21,529

Total

Female

Male

103
317
282
229
288
376
275
220
132
99
54
41
20
14
8
5
5
2,468

106
328
282
213
245
460
478
324
259
179
137
80
46
22
12
5
3
3,179

Total
209
645
564
443
533
835
753
544
390
278
192
121
65
37
20
10
8
5,647

Female
544
1,897
2,135
1,912
1,636
1,208
928
822
631
491
392
312
237
179
147
95
90
13,657

Male

Total

562
1,946
2,186
1,975
1,638
1,218
890
743
584
495
396
276
209
155
117
68
62
13,519

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

54

1,105
3,843
4,320
3,887
3,274
2,426
1,818
1,566
1,214
986
789
588
446
335
264
164
152
27,176

Annex Table 15: 1996 LABOUR FORCE PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
0
0
0
527
678
650
625
584
489
377
329
262
184
132
80
0
0
4,917

Urban
Male

Total

0
0
0
558
577
520
386
409
318
312
251
181
160
116
77
0
0
3,865

Total

Female

0
0
0
1,085
1,255
1,170
1,011
994
807
689
580
444
344
248
157
0
0
8,782

Male

0
0
0
0
92
202
191
141
81
59
33
22
9
7
0
0
0
836

Total

0
0
0
0
48
339
452
320
249
178
134
76
39
16
0
0
0
1,851

Female

0
0
0
0
140
540
643
461
330
237
167
98
48
23
0
0
0
2,687

0
0
0
527
770
852
816
726
570
436
362
284
193
139
80
0
0
5,753

Male

Total

0
0
0
558
625
859
838
730
567
489
385
258
198
132
77
0
0
5,717

0
0
0
1,085
1,394
1,711
1,653
1,455
1,137
926
747
542
392
271
157
0
0
11,470

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

Annex Table 16: 1996 UNEMPLOYMENT PROJECTIONS (000)

Rural

Age
<1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
>75
Total

Female
0
0
0
0
21
70
52
36
15
15
8
7
1
1
0
0
0
225

Urban
Male

Total
0
0
0
0
7
33
15
5
1
2
2
0
0
0
0
0
0
65

Total

Female
0
0
0
0
28
102
67
42
16
16
10
7
1
2
0
0
0
290

Male

0
0
0
0
39
80
54
21
4
1
2
3
1
1
0
0
0
206

Total
0
0
0
0
29
107
60
14
4
4
5
3
1
0
0
0
0
228

Female
0
0
0
0
68
187
113
35
8
6
7
6
3
1
0
0
0
434

0
0
0
0
60
150
105
57
19
16
10
9
3
2
0
0
0
432

Male

Total
0
0
0
0
36
140
74
19
5
6
7
3
1
1
0
0
0
292

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

55

0
0
0
0
96
289
180
77
24
22
17
13
4
2
0
0
0
724

SUMMARY OF THE PROJECTIONS

A.

Population Projections by Age and Sex (000)

Age

0-17
Male

1993
1994
1995
1996

Female

7,181
7,357
7,525
7,689

15-19
Total

7,027
7,191
7,346
7,498

Male

14,208
14,548
14,871
15,187

Female

1,426
1,503
1,574
1,638

18-75
Total

1,436
1,516
1,583
1,636

2,862
3,019
3,157
3,274

Male

Female

5,231
5,425
5,626
5,829

Total

5,528
5,730
5,943
6,159

10,759
11,155
11,569
11,988

Note: the total projected population is the sum of populations 0-17 and 18-75 years.
B.

Population Projections by Sex and Location (000)

Location

Rural
Male

1993
1994
1995
1996

C.

9,667
9,897
10,121
10,340

10,428
10,683
10,937
11,189

Urban
Total
20,095
20,580
21,058
21,529

Male

Female

2,746
2,885
3,029
3,179

2,127
2,238
2,352
2,468

Total
Total
4,873
5,123
5,381
5,647

Male
12,413
12,782
13,150
13,519

Female

Total

12,555
12,921
13,289
13,657

24,968
25,703
26,439
27,176

Labour Force Projections by Sex and Location (000)

Location

Rural
Male

1993
1994
1995
1996

Female

3,582
3,675
3,770
3,865

Female
4,516
4,646
4,780
4,917

Urban
Total
8,098
8,321
8,550
8,782

Male

Female

1,590
1,675
1,762
1,851

712
753
794
836

Total
Total
2,302
2,428
2,557
2,687

Male
5,171
5,350
5,532
5,717

Female

Total

5,229
5,399
5,574
5,753

Source: Long Range Planning Division, Ministry of Planning and National Development, 1993

56

10,400
10,749
11,107
11,470