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Informal Employment in Russia:
Overview
Oksana Sinyavskaya
Daria Popova
Workforce Development and Skills Mismatch — GPN Methodology Seminar 26-28,
June 2003
Russia's output, population, and employment
growth (% change)
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
GDP
growth
-3
-5
-14,5
-8,7
-12,7
-4,1
-3,4
0,9
-4,9
5,4
9
5
4,3
* estimate
Population
growth
…
1,1
-0,2
-2,1
-0,4
-2,2
-3,2
-2,7
-2,8
-5,3
-5,1
-6
-3
GDP growth Employment
p/c
growth
…
…
-6,1
-2
-14,3
-2,4
-6,6
-1,7
-12,3
-3,3
-1,9
-3
-0,2
-0,7
3,6
-2
-2,1
-1,3
10,7
0,2
14,1
0,6
11
0,6
7,3
2,1*
Total (Based on the ILO Definition) and Registered
Unemployment
16,0
13,2
14,0
12,6
11,8
12,0
9,8
9,7
9,5
10,0
8,9
8,1
8,0
6,0
5,9
5,2
3,3
4,0
2,0
3,6
2,3
0,8
2,9
2,9
1,7
1,1
1,5
1,6
0,0
1992
1993
1994
1995
1996
1997
1998
1999
2000
Number of unemployed, % to active population
Number of registered unemployed, % to active population
2001
Distribution of Unemployed by Average Duration of
Searching a Job: 1992 - 2001
100
90
80
70
more than 1 year
6 - 12 months
3 - 6 months
less than 3 months
60
50
40
30
20
10
0
1992
1996
1997
1998
1999
2000
2001
Differentiation of Wages and Incomes:
1991 - 2001
Indices
of Differentiation
1991
1994
1995
1996
1997
1999
2000
2001
Decile Coefficient
for Wages
7.8
23.4
26.4
24.0
25.0
32.1
34.0
39.6
0.317
0.439
0.454
0.445
0.447
0.480
0.483
0.507
4.5
15.1
13.5
13.0
13.8
13.9
13.8
13.8
0.260
0.409
0.381
0.387
0.401
0.400
0.399
0.396
Gini Coefficient
for Wages
Decile Coefficient
for Incomes
Gini Coefficient
for Incomes
Poverty Rate and and Poverty Gap: 1992-2000
40
35
30
25
20
15
10
5
0
1992
1993
1994
1995
1996
1997
1998
1999
2000
Share of the population with income below the poverty line
Poverty gap, % of the gross money income of the population
2001
Poverty rates (per cent): Russia’s Statistics Committee data
80
73,1
70
65
65,1
59,3
60
56,8
50
42
40
30
48,1
46,7
34,5
33,5
49,3
50,2
47,9
35,9
40
37,8
32,1
31,5
20
22,4
24,7
28,4
29,1
27,6
1999
2000
2001
23,3
22
20,3
1996
1997
10
0
1992
1993
1994
1995
1998
According to Goskomstat RF—based on the balance of money income and expenditure(average, per year)
According to household budget survey, using money income (average per year), of which:
Rural residents
According to household budget survey, using disposable resources, of which:
Rural residents
A Conceptual Framework: the Informal Employment
Informal Employment
In informal
enterprises
Outside informal
enterprises
= “shadow” employment
Informal own-account
enterprises
For formal enterprises
Enterprises of informal
(unregistered) employers with
less than 5 employees
For households
With no fixed employer
DATA SOURCES
•
Population Surveys on Employment Issues (Russia’s State
Statistics Agency - Goskomstat), quarterly, since 1999, N = appr. 250260 thousands respondents
•
Population Survey on Social and Economic Situation of Russia’s
Population (Carnegie Moscow Center), 2000, N = 5000 households
•
Russia’s Longitudinal Monitoring Survey (Institute of Sociology and
Institute of Nutrition of Russian Academy of Sciences, and Paragon
Research International), panel since 1994, autumn of 1998-2001, N =
appr. 4500 households (more than 10000 respondents)
•
VCIOM’s Monitoring (Russian Center for Public Opinion and Market
Research - VCIOM), 1998-2001, November, N = appr. 2400
respondents
EMPIRICAL DEFINITIONS
Shadow Economy: Informal Labor Relations in
Formal Sector
Russia’s
State
Statistics
Agency
CMC
RLMS
VCIOM
Nonregistered
contracts
-
+
+
+
Grey
wages/salary
etc.
-
+
-
-
Data
sources:
EMPIRICAL DEFINITIONS
Informal Economy
Russia’s State Statistics Committee - Goskomstat
Criteria for a firm /
enterprise
Individual entrepreneur
Working for a person
Working for an employer in
paid employment
Firm is not registered
Individual entrepreneurship
without registration
+
Without registration; for
own/family enterprise;
member of a producer’s
cooperative
Working in a farm
+
Working for a household
for producing smth. for
realization
+
EMPIRICAL DEFINITIONS
Informal Economy
Household Survey of Carnegie Moscow Center (2000)
Criteria for a firm /
enterprise
Individual entrepreneur
Less than 5 employees/
individuals
Individual entrepreneurship/
self-employment without
registration
Working for a person
-
Working for an employer in
paid employment
-
Working in a farm
-
Working for a household
for producing smth. for
realization
-
EMPIRICAL DEFINITIONS
Informal Economy
Russia’s Longitudinal Monitoring Survey
Criteria for a firm /
enterprise
Individual entrepreneur
Working for a person
Working for an employer in
paid employment
Family enterprises/
cooperatives/ individuals
Individual entrepreneurship
& self-employment
Working not at enterprise,
not at an organization,
engaged in some
additional kind of work
without any agreement,
official contract or license
Working in a farm
-
Working for a household for
producing smth. for
realization
-
EMPIRICAL DEFINITIONS
Informal Economy
VCIOM’s Monitoring
Criteria for a firm /
enterprise
Individual entrepreneur
Working for a person
Working for an employer in
paid employment
Individuals
Self-employment
Working for an own / family
enterprise with employees
Working in a farm
-
Working for a household for
producing smth. for
realization
-
Informal Employment in Urban and Rural Area *
Main job
Urban
Rural
Total
informal
sector
% of
employed
Total number of jobs
Jobs in nonagricultural sector
value
per cent
value
per cent
value
per cent
4570817
2565148
64,1
35,9
5150954
4039384
56,0
44,0
4352073
971165
81,8
18,2
7135965
100,0
9190338
100,0
5323238
100,0
11,1
14,3
* Russia’s State Statistics Agency – Goskomstat 2001
8,3
Informal Employment in Rural Area: Composition of Per Capita
Aggregate Receipts by Income Groups
Respondents with per capita aggregate receipts:
1 – 2 SM
Below 1 SM
Above 2 SM
XI
1998
X
2000
X
2001
XI
1998
X
2000
X
2001
XI
1998
X
2000
X
2001
Wages
17,6
18,5
18,4
14,4
18,3
21,4
11,3
20,7
18
State transfers
27,6
35,8
40,3
29,5
36
27,3
13,5
13,6
10,7
42
34,9
26,5
43,2
35,1
37,7
55,1
37,9
49,9
2,1
3,9
7,1
8,2
7,4
18,6
17,5
15,7
33,4
39,9
31
19,4
35
27,7
19,1
37,6
22,2
16,5
11,3
9,4
7,7
9,8
7,6
7,9
10,7
11,4
6,3
Other money receipts
1,6
1,1
7
3
3
5,6
9,4
6,8
15
Total
100
100
100
100
100
100
100
100
100
Receipts from household
production, including:
Money income
Money equivalent of
consumed household
production
Non-state transfers
Dynamics of Informal Employment in Formal and
Informal Sectors, Urban Population, Multiple Jobs
(% of total employment)
RLMS data
CMC GKS
data data *
VCIOM data
IX
1998
X
2000
X
2001
XI
2000
XI
2001
XI
1998
XI
1999
XI
2000
Employment
in informal 11,2
sector
12,2
10,3
3,8
9,9**
5,8
4,8
3,9
Total
informal
14,3
employment
16,4
…
8,4
…
12,8
13
13
* Goskomstat (National Statistics Agency) data do not include any
of shadow employment
** 8.9% for share of urban population employed in informal sector
in non-agriculcural activities
The Unit Weight of Expenditure on Work
remuneration in GDP and Cost of Inputs into
Production
1990
1995
1996
1997
1998
1999
2000
48,8
45,2
49,6
50,0
47,2
40,9
40,0
Official
48,8
34,8
37,9
38,3
37,1
29,9
28,9
Hidden
-
10,4
11,7
11,7
10,1
11,0
11,1
13,0
10,6
11,5
12,1
12,8
11,8
12,0
…
15,8
13,7
13,7
13,3
14,1
14,4
26,9
23,8
23,0
23,0
21,9
20,8
20,3
The unit weight of wages of
employees (including
hidden wages) in GDP
Including:
The unit weight of wage
costs in costs of inputs into
production and sales of
products (services) by
branches of economy:
Manufacturing industry
Agriculture
Construction
Structure of Informal Employment,
Urban Population 2000
Main job
Secod job
CMC data RLMS data CMC data RLMS data
Formal employment
Informal
employment in
formal sector
Jobs in informal
sector, including:
Employees
Entrepreneurs / selfemployed
Total
N
* Value equals to 1
92,0
88,2
85,6
46,8
4,4
3,5
6,7
20,7
3,6
8,3
7,8
32,4
2,4
5,0
6,7
16,0
1,2
3,0
*
14,4
100,0
1425
100,0
3174
100,0
90
100,0
188
Gender Composition of Employment in Informal
Sector, Urban Population
MEN
WOMEN
main / the only job
total
CMC, 2000
52,9
47,1
100
RLMS, 2000
54,3
45,7
100
RLMS, 2001
50,2
49,8
100
Goskomstat, 2001
52,7
47,3
100
second / additional regular job
RLMS, 2000
45,1
54,9
100
RLMS, 2001
49,1
50,9
100
Goskomstat, 2001
51,6
48,4
100
Education Profile of Informally Employed,
Urban Population / Main Job, 2000
Informal employment
Level of education
Formal sector
Informal sector
CMC
data
RLMS
data
CMC
data
RLMS
data
No education, primary or
incomplete secondary
3,9
11,8
7,9
20,5
Complete Secondary
19,6
11,8
12,7
15,2
Complete Secondary
Vocational
25,5
60,7
23,8
51,8
51
15,6
55,6
12,5
100,0
100
100
100
Higher and post-graduate
Total
Age Profile of Informally Employed,
Urban population / Main Job, 2000
35
30
25
20
15
10
5
0
14-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
age
RLMS, inf.sect.
CMC, inf.sect.
RLMS, total
CMC, total
55-59
60-64
Spheres of Concentration of Informal Employment:
Branches of Economy, Urban Population
Informal sector
Wholesale and Retail Trade,
Catering
Construction, Transport and
Communications
Industry
Housing
Education and Science
Health care, Social Security
Culture and Art
Finances, Insurance
Agriculture and Forest
Industry
Other
Total
Formal
sector
National
Statistics
Agency, 2001
CMC data,
2000 *
CMC data,
2000 *
54,1
46,0
52,4
15,3
18,0
12,7
11,9
3
1,2
0,9
0,6
0,1
4,0
4,0
0,0
6,0
2,0
4,0
6,4
1,6
6,4
1,6
4,8
4,8
10,6
4,0
1,6
2,3
100
12,0
100
7,9
100
* main / the only job
Spheres of Concentration of Informal Employment:
Professional Groups, Urban Population / Main Job
Service workers
Artisans
(Top-) managers,
officials
Share of informal employment in total employment by
groups, %
RLMS data, 2001
Informal job in
Job in informal
Total informal
formal sector
sector
employment
33,0
35,6
34,9
20,5
11,9
14,5
2,7
18,8
13,9
Blue-collar workers
9,8
13,4
12,3
Unskilled workers
Specialists
Other professional
groups
14,3
13,4
9,2
6,9
10,7
8,9
6,3
4,2
4,8
Issues for Future Research
Concepts of informal employment:
•
Formal, informal and self-employment,
•
Informal employment outside informal enterprises,
•
Informality within labor contracts,
•
Working at home, on the streets, etc.,
•
Informal employment in rural area,
Policy implications:
•
•
Inequality in informal economy: vulnerable groups,
Social guarantees, wages/salaries, and working hours
Issues for Future Research (cont.)
Data:
•
•
Comparability of empirical definitions used in surveys,
Detailed questions / special survey on informal
employment,
•
Improving both qualitative and quantitative researches
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