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Informal Employment in Russia: Overview
Oksana SinyavskayaDaria Popova
Workforce Development and Skills Mismatch — GPN Methodology Seminar 26-28, June 2003
Russia's output, population, and employment growth (% change)
GDP growth
Population growth
GDP growth p/c
Employment growth
1990 -3 … … …1991 -5 1,1 -6,1 -21992 -14,5 -0,2 -14,3 -2,41993 -8,7 -2,1 -6,6 -1,71994 -12,7 -0,4 -12,3 -3,31995 -4,1 -2,2 -1,9 -31996 -3,4 -3,2 -0,2 -0,71997 0,9 -2,7 3,6 -21998 -4,9 -2,8 -2,1 -1,31999 5,4 -5,3 10,7 0,22000 9 -5,1 14,1 0,62001 5 -6 11 0,62002 4,3 -3 7,3 2,1*
* estimate
Total (Based on the ILO Definition) and Registered Unemployment
5,25,9
8,1
9,5 9,7
11,8
13,212,6
9,88,9
0,8 1,12,3
3,3 3,62,9 2,9
1,7 1,5 1,6
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Number of unemployed, % to active populationNumber of registered unemployed, % to active population
Distribution of Unemployed by Average Duration of Searching a Job: 1992 - 2001
0
10
20
30
40
50
60
70
80
90
100
1992 1996 1997 1998 1999 2000 2001
more than 1 year
6 - 12 months
3 - 6 months
less than 3 months
Differentiation of Wages and Incomes: 1991 - 2001
0.3960.3990.4000.4010.3870.3810.4090.260Gini Coefficient for Incomes
13.813.813.913.813.013.515.14.5Decile Coefficient for Incomes
0.5070.4830.4800.4470.4450.4540.4390.317Gini Coefficient for Wages
39.634.032.125.024.026.423.47.8Decile Coefficient for Wages
20012000199919971996199519941991Indices of Differentiation
Poverty Rate and and Poverty Gap: 1992-2000
0
5
10
15
20
25
30
35
40
1992 1993 1994 1995 1996 1997 1998 1999 2000
Share of the population with income below the poverty linePoverty gap, % of the gross money income of the population
2001
Poverty rates (per cent): Russia’s Statistics Committee data
22
49,3
65,1
32,1
37,8
50,2
40
27,629,128,4
23,320,3
22,424,7
59,3
47,9
35,934,5
42
31,533,5
73,1
65
48,1
56,8
46,7
0
10
20
30
40
50
60
70
80
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
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 residentsAccording 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
For formal enterprises
For households
With no fixed employer
Informal own-account enterprises
Enterprises of informal (unregistered) employers with
less than 5 employees
DATA SOURCES
• Population Surveys on Employment Issues (Russia’s State Statistics Agency - Goskomstat), quarterly, since 1999, N = appr. 250-260 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
Data sources:
Russia’s State
Statistics Agency
CMC RLMS VCIOM
Non-registered contracts
- + + +
Grey wages/salary etc.
- + - -
Shadow Economy: Informal Labor Relations in Formal Sector
EMPIRICAL DEFINITIONSInformal Economy
Russia’s State Statistics Committee - Goskomstat
Criteria for a firm / enterprise
Firm is not registered
Individual entrepreneur Individual entrepreneurship without registration
Working for a person +
Working for an employer in paid employment
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 DEFINITIONSInformal Economy
Household Survey of Carnegie Moscow Center (2000)
Criteria for a firm / enterprise
Less than 5 employees/ individuals
Individual entrepreneur 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 DEFINITIONSInformal Economy
Russia’s Longitudinal Monitoring Survey
Criteria for a firm / enterprise
Family enterprises/ cooperatives/ individuals
Individual entrepreneur Individual entrepreneurship & self-employment
Working for a person -
Working for an employer in paid 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 DEFINITIONSInformal Economy
VCIOM’s Monitoring
Criteria for a firm / enterprise
Individuals
Individual entrepreneur Self-employment
Working for a person -
Working for an employer in paid 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 *
value per cent value per cent value per cent
Urban 4570817 64,1 5150954 56,0 4352073 81,8Rural 2565148 35,9 4039384 44,0 971165 18,2Total
informal sector
7135965 100,0 9190338 100,0 5323238 100,0
% of employed
11,1 14,3 8,3
Main job Total number of jobsJobs in non-
agricultural sector
* Russia’s State Statistics Agency – Goskomstat 2001
Informal Employment in Rural Area: Composition of Per Capita Aggregate Receipts by Income Groups
Respondents with per capita aggregate receipts:
Below 1 SM 1 – 2 SM Above 2 SM
XI 1998
X 2000
X2001
XI 1998
X 2000
X2001
XI 1998
X 2000
X2001
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
Receipts from household production, including: Money income Money equivalent of consumed household production
42
2,1
39,9
34,9
3,9
31
26,5
7,1
19,4
43,2
8,2
35
35,1
7,4
27,7
37,7
18,6
19,1
55,1
17,5
37,6
37,9
15,7
22,2
49,9
33,4
16,5
Non-state transfers 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
Dynamics of Informal Employment in Formal and Informal Sectors, Urban Population, Multiple Jobs
(% of total employment)
CMC data
GKS data *
IX 1998
X 2000
X 2001
XI 2000
XI 2001
XI 1998
XI 1999
XI 2000
Employment in informal
sector11,2 12,2 10,3 3,8 9,9** 5,8 4,8 3,9
Total informal
employment14,3 16,4 … 8,4 … 12,8 13 13
RLMS data VCIOM data
* 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
20,320,821,923,023,023,826,9Construction
14,414,113,313,713,715,8…Agriculture
12,011,812,812,111,510,613,0Manufacturing industry
The unit weight of wage costs in costs of inputs into production and sales of products (services) by branches of economy:
11,111,010,111,711,710,4-Hidden
28,929,937,138,337,934,848,8Official
Including:
40,040,947,250,049,645,248,8
The unit weight of wages of employees (including hidden wages) in GDP
2000199919981997199619951990
Structure of Informal Employment, Urban Population 2000
CMC data RLMS data CMC data RLMS data
Formal employment 92,0 88,2 85,6 46,8
Informal employment in formal sector
4,4 3,5 6,7 20,7
Jobs in informal sector, including:
3,6 8,3 7,8 32,4
Employees 2,4 5,0 6,7 16,0 Entrepreneurs / self-employed
1,2 3,0 * 14,4
Total 100,0 100,0 100,0 100,0 N 1425 3174 90 188
Main job Secod job
* Value equals to 1
Gender Composition of Employment in Informal Sector, Urban Population
MEN WOMEN 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
RLMS, 2000 45,1 54,9 100
RLMS, 2001 49,1 50,9 100
Goskomstat, 2001 51,6 48,4 100
main / the only job
second / additional regular job
Education Profile of Informally Employed, Urban Population / Main Job, 2000
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
Higher and post-graduate 51 15,6 55,6 12,5
Total 100,0 100 100 100
Level of education
Informal employment
Formal sector Informal sector
Age Profile of Informally Employed, Urban population / Main Job, 2000
0
5
10
15
20
25
30
35
14-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64
age
RLMS, inf.sect. CMC, inf.sect.
RLMS, total CMC, total
Spheres of Concentration of Informal Employment: Branches of Economy, Urban Population
Formal sector
National Statistics
Agency, 2001
CMC data, 2000 *
CMC data, 2000 *
Wholesale and Retail Trade, Catering
54,1 46,0 52,4
Construction, Transport and Communications
15,3 18,0 12,7
Industry 11,9 4,0 6,4Housing 3 4,0 1,6Education and Science 1,2 0,0 6,4Health care, Social Security 0,9 6,0 1,6Culture and Art 0,6 2,0 4,8Finances, Insurance 0,1 4,0 4,8Agriculture and Forest Industry
10,6 4,0 1,6
Other 2,3 12,0 7,9Total 100 100 100
Informal sector
* main / the only job
Spheres of Concentration of Informal Employment: Professional Groups, Urban Population / Main Job
Informal job in formal sector
Job in informal sector
Total informal employment
Service workers 33,0 35,6 34,9Artisans 20,5 11,9 14,5(Top-) managers, officials
2,7 18,8 13,9
Blue-collar workers 9,8 13,4 12,3
Unskilled workers 14,3 9,2 10,7Specialists 13,4 6,9 8,9Other professional groups
6,3 4,2 4,8
RLMS data, 2001
Share of informal employment in total employment by groups, %
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
Data:• Comparability of empirical definitions used in surveys,• Detailed questions / special survey on informal
employment,
• Improving both qualitative and quantitative researches
Issues for Future Research (cont.)