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Shedding light on the numbers behind women’s employment in the unofficial sector

Their numbers are likely in the millions, and they are keeping the economy running in hard times, often throwing their health, family wellbeing, and financial stability into the bargain. Yet they are underpaid, exploited, and largely ignored by the official census.

“Our work is in general more than men’s, but our wages are always less.” 

—Rice field worker, 43, Gilan

It is much harder for Sunnis to get a job, especially in the public sector or companies which belong to the state.” 

—Cosmetic salesperson, 41, Mariwan

“The salary is not enough to cover the rent and my child’s expenses. My daughter couldn’t go to kindergarten when she was little because I couldn’t afford the registration fee.”

—Accountant/Auditor, 41, undisclosed location

At least 1.5 million of Iran’s working women are employed in “the unofficial sector,” (bakhshe qeyre rasmi), a review of publicly available data shows. Broadly defined as an informal form of employment that lacks the structure and security of work in the state and formal private sector, this gray economic area comprises a spectrum of activities ranging from commonplace urban jobs like hairdressing and shopkeeping to traditional and rural-based activities like at-home handicrafting and farmwork. (Separately, more than 90 percent of Iranian workers, including women, are employed on the basis of 89-day contracts that deprive them of legal rights and benefits. Many of them work for public or semi-public institutions.) 

The women working in these professions have one thing in common: The World Bank defines them as “own-account workers”, or individuals who, working on their own account or with one or more more partners, hold the types of jobs defined as “self-employment jobs” and have not engaged on a continuous basis any employees to work for them. 

By definition, this type of work does not offer the legal protections, social and healthcare benefits, and wage guarantees of formal employment. Furthermore, workers in this vast area do not constitute a cohesive group, and therefore find it more difficult than other workers to form organized labor groups. (Some are, however, active in various unofficial online women’s rights groups that effectively act as unions.)

Yet informal employment is increasingly common in Iran’s restrictive job market, where shrinking opportunities encourage cronyism. It is especially prevalent among women, whose entry into the formal job market is further impeded by gender discrimination, including systemic bias and legal restrictions. 

“I requested formalization from the department head, but despite several men who started in the informal sector with me now being formalized, my request was denied,” says a 41-year-old accountant. “I was explicitly told by the department head that if not, you can leave. I can only work here under informal legal conditions.

As a result of such discrimination, informal employment leaves working women more vulnerable to exploitation, job loss, financial instability, and unsafe working conditions. The inherent lack of social protections, as well as access to childcare and health services, further weakens their socioeconomic position. 

 Informal employment is a survival-type mechanism, write the authors of a 2019 Tehran University paper on the Experience of Female Workers in the Informal Sector of the Iranian Economy. Although it is strongly associated with social exclusion, when women enter the labor market, informal employment is the most important option for them.

Available data suggests that women enter this type of employment after exhausting all other options. In 30 interviews with female workers in this sector, Tehran Bureau encountered multiple women around the age of 40 who are divorced and entered the informal labor market to earn an income. However, this income often proves insufficient, leading most of them to depend on their families for additional support. 

How many women work in Iran’s informal sector?

According to 2022 data from the International Labor Organization, vulnerable employment in the Islamic Republic of Iran accounts for 39.6 percent of the labor force, with the majority of those workers having own-account status. “Own-account and contributing family workers are more likely to experience low job and income security than employees and employers, as well as lower coverage by social protection systems and employment regulation,” the ILO states.

-The number of employed persons reached 24,305,714 in September of last year, according to the Statistical Center of Iran.

-The current overall level of women’s employment in Iran is 15.7 percent, according to the World Bank. This means around 3,815,997 women are currently working in Iran according to available statistics. However, this percentage probably fails to account for millions more economically active women who are miscategorized or unreported in the official census. 

-The International Labor Organization estimates that 39.6 percent of all workers in Iran are informally employed. This is equal to 1,511,134 women.

In which sectors are Iran’s informally employed women the most active?

The largest percentage (45.48%) of informally employed women work in the service sector in urban areas, available data suggests. 

Methodology: We arrived at this number by taking Iran’s urban-to-rural ratio (75.94%) according to the United Nations 2019 Human Development Index and applying it to the total number of informally employed women (1,511,134). This gives us the total number of informally employed, urban-dwelling women (1,147,555). We then used data from the Statistical Center of Iran determining that 59.9% of the urban population was employed in the service sector as of 2015. Based on this calculation, we concluded that 687,385 urban-dwelling women work in informal employment in the service sector. This is 45.48% of all informally employed women in Iran. 

Another 20.7% of informally employed women work in crafts and related trade.

Methodology: We arrived at this number by using Statistical Center of Iran data from 2018, which states that 20.7% of all employed women (or 789,911 women) work in “crafts and related trade.” Of these, at least 39.6%, or a total of 312,804 women, are employed informally, according to ILO figures

In addition, around 18% of informally employed women work in agriculture.

Methodology: We arrived at this number by using current World Bank data, which suggests that 18.2 percent, or 694,511 of all working women in Iran are active in agriculture. Of these, at least 39.6%, or a total of 275,026 women, are employed informally, according to ILO figures

However, various reports indicate that many rural women, despite their active involvement in agriculture and animal husbandry, are statistically counted as housewives. This recent article by Stimson indicates that 20% of Iran’s employed women are in the agricultural sector. 

Underpaid and undercounted

Sources interviewed by Tehran Bureau, as well as various scholarship conclude that women’s participation in the informal sector may be grossly underreported. Many traditionally female activities that lead to the production of marketable farm goods are broadly considered to be part of a rural woman’s role as a homemaker, and are thus not reported in the census, Fatemeh Etemad Moghadam writes in a 2009 Journal of Iranian Studies paper. The situation is similar in urban areas, where women of all social strata undertake informal employment. Often, they are miscategorized as homemakers in the census, which only provides categories for labor performed outside the home.

“One of the biggest problems of the women’s community who are active economically is that, unfortunately, no authority has yet taken responsibility for announcing accurate statistics and figures,” Tehran Chamber of Commerce member Nasim Tavakol recently told local media. She went on to elaborate that though this competency falls under the Vice Presidency for Women and Family, that office’s ability to collect accurate economic data is severely limited. Other statistics are based on unreliable evidence of women’s economic activity, such as obtaining a permit to import/export or a role on a private company’s board of directors. “When we follow up on these women, we see they are sitting at home but nominally members of a public or private joint-stock company,” Tavakol said. 

Available scholarship indicates that the services and agricultural sectors are generally more popular among Iran’s working women. A 2021 study, Formal Versus Informal Labor Market Segmentation in Iran, focuses on wage differentials in the Iranian labor market, particularly between formal and informal sectors. It uses household survey data from 2001, 2006, 2011, and 2016 to examine wage structures and the characteristics of the informal sector. Key findings include the wage gap between the formal and informal sectors, with women’s wages being significantly lower in all sectors, especially in agricultural self-employment. 

The available figures on sector-specific women’s informal employment are probably much higher in reality, especially in the countryside. Dr. Rizwan Moghadam, a researcher, women’s rights activist, and human rights activist, highlights the growth of female enrollment in higher education programs nationwide, especially in specialized areas including IT, mathematics and engineering. 

Moghadam points to recent data made available by Leila Felahati, Iran’s Director General of International Affairs of the Presidential Office of Women and Family Affairs. It suggests 56% of all undergraduate students in public universities in Iran are women, including 69% in basic sciences, 23% in technical and engineering, 52% in agriculture, and 53% in medical studies. Over the past decade, the number of technical and vocational training centers in the country has quadrupled, and women currently have access to training in 784 technical fields, including mechanics, computers, electronics, and technology.

This growth should, in theory, correspond with some general growth in the female labor force, even though the available figures do not support this assumption. Moghadam points to rural women as a leading example of an active, but undercounted labor force.

 “In the case of rural women,” Moghadam told Tehran Bureau, “they have a higher participation rate in agriculture or animal husbandry, with no long-standing obstacles according to the ruling traditional system.”

This post is also available in: فارسی (Persian)

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