surement error. However, he and Artecona found that the bias introduced as a result of measurement error in the data selected for each variable was not so large that the user would learn nothing from the variable. In addition, he said, there are so many different sources of measurement error, in so many different directions, that “our sense is that it can be treated as random error.” Although the database does not provide an indicator of the relative shares of employment in the formal and informal sectors for each country, Rama noted that some of the variables in the database do provide information on informal employment, such as labor force levels, labor force participation rates, unemployment rates, and work hours. In addition, one of the variables—the average wage of casual agricultural workers—refers exclusively to the informal sector.

In further discussion, a committee member noted that the committee is charged with creating “an ongoing, living database.” He asked Rama what resources would be required to respond to the comments offered and to continue compiling and updating the database. Rama replied that a small team of experts could visit countries and arrange systematic meetings with labor lawyers, statistical officers, and others to identify and obtain the most accurate data sources. He suggested it might be appropriate to begin by visiting a core of about 30 countries. Another committee member described Rama’s response as “enormously optimistic,” because “a huge commitment of resources is usually necessary” to obtain reliable labor market data over time for just one country. Even an expert on a particular country may take a long time to fully understand such complex issues as the role of labor unions in that country’s economic growth. Developing an understanding of these complex issues internationally, in many different countries around the world, is “exceptionally difficult,” requiring much more time, funding, and expertise, he argued.



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