Informal Employment in Russia: Combining Disadvantages and Opportunities

Source: RePEc


The paper discusses the problem of informal employment in Russia, its structure and the factors contributing to the individual decisions making when choosing specific employment type. Informal employment is a highly diverse area comprising individuals with different profiles and motivations to prefer specific informal options over formal employment. Empirical findings using the 2003 NOBUS dataset confirm that defined groups of informally employed individuals are consistently different according to their main characteristics. This finding allows us to regard informal employment as a superior entrepreneurial sector or an inferior disadvantaged sector of the labour market depending on the specific segment.

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    ABSTRACT: This paper clarifies the social and economic effects of employment in the informal sector on the poor in Russia in recent years. The article describes the extent to which the figures for informal sector at large and unofficial employment in particular vary in different estimates and the effect they have on the average labor income of the poor. The major impact of the research consists of the development of a universal method for the estimation of the scales of labor income of the poor in the informal sector. Using the latest available data from Russian Federal State Statistics Service, this indicator is calculated for the poor and than compared with average wages in the formal sector and the subsistence minimum (official poverty line). The study concludes that the informal sector is a factor of social stability in a postsocialist transition economy, which, however, cannot alleviate poverty.
    No preview · Article · Apr 2012 · Social Indicators Research