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Informality in the Russian labour market

Priority areas of development: economics
The project has been carried out as part of the HSE Program of Fundamental Studies.

This report summarizes the 3-year (2010-2012) project addressing informality on the Russian labour market. Studies included in the report provide a comprehensive picture of labour market informality and its implications for welfare and inequality.  High and growing deformalization indicates multiple institutional failures and is a restricting factor on economic growth. In this sense, informal employment appears to be one of the challenges to economic and social development.
1. The Research focuses on the scale, dynamics, determinants and implications of Russian labor market informality.

2. Its aim is to provide a multidimensional analysis of informality in the Russian labor market.

3. Empirically, most studies included in the report are based on 8-18 rounds of the Russian Longitudinal Monitoring Survey – HSE[1] (RLMS-HSE) that cover the period of 1998-2010. The 2009 survey included a special supplement focused specifically on informality. The supplement provides additional in-depth insight into the issue. Additionally, we also used data from the Russian Labor Force Survey conducted regularly by Federal State Statistics Service between 1999 and 2011.

4. According to the main findings, the size of informal employment in Russia increased substantially during the 2000s.  Informal employment appears as a highly heterogeneous phenomenon consisting of three main components, including self-employment, informal wage and salary work, and irregular (casual) employment. However, there are no rigid borders between formal and informal jobs and moving from one to the other is easy and happens frequently.  The expansion of informal employment is explained by the high costs of job creation in the formal sector and the low cost of informality.

5. Implementation of the research results
Findings presented in the report may have several practical applications.
1) add to our knowledge and understanding of labor market development in transition economies and, especially, in Russia's case;
2) contribute to the methodology of studying informal employment and data collection;
3) can guide policy recommendations concerning labour market policy and institutional development. 

6. International partners.
The following foreign partners of the Centre for Labour Market Studies took part in the studies presented in the report:
  • Hartmut Lehmann, PhD, Professor of Economic Policy in the department of economics at the University of Bologna, Program Director of the IZA (Institute for the Study of Labor, Bonn, Germany) research area "Labor Markets in Emerging and Transition Countries".
  • Anzelika Zaiceva, Ph.D, Assistant Professor at the Department of Economics, University of Modena and Reggio Emilia, Research Fellow at IZA.



Лукьянова А. Л. Пенсионное страхование, неформальная занятость и самозанятость / Высшая школа экономики. Серия WP3 "Проблемы рынка труда". 2012. № WP3/2012/02.
Gimpelson V. E., Zudina A. A. “Informals” in the Russian Economy. / Пер. с рус. // Problems of Economic Transition. 2012. Vol. 55. No. 5. P. 26-57.


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