According to the existing literature, informality rates for Russia vary in a wide range from slightly more than 5 to nearly 30 percent. The question arises: what are causes and consequences of so huge variation? Using RMLS data for 2009 the paper investigates the degree of congruence between several alternative definitions of the informal employment in the context of Russian labor market. Analysis shows that depending on empirical definitions informality rates considerably differ – from 11 to 24 percent. With different approaches not only scale of the informal employment but also its socio-demographic profile radically changes. Furthermore, the econometric analysis reveals that the conditional impact of particular factors on the risk of informality varies considerably from one definition to another. This suggests that that estimates of the informal employment for Russia could hardly be regarded as methodologically robust.
Having unique data we investigate informal employment and “envelope payments” as additional costs of worker displacement in the Russian labor market. In particular we analyze whether displaced workers experience
more involuntary informal employment than their non-displaced counterparts. Our main results confirm
our contention that displacement entraps some of the workers in involuntary informal employment. Those who quit, in turn, experience voluntary informality for the most part, but there seems a minority of quitting workers who end up in involuntary informal jobs. This scenario does not fall on all the workers who separate but predominantly on workers with low human capital. Being able to distinguish between involuntary and voluntary informal employment our study contributes to the debate in the informality literature on the issue of segmented versus integrated labor markets. We also pursue the issue of informality persistence and find that informal employment is indeed persistent as some workers churn from one informal job to the next. Job separations in general and not displacement events per se are associated with larger “envelope payments”.
Traditionally, research interest focuses on those employed and unemployed in the labor market while relatively little attention is paid to people classified as economically inactive. However, changes in inactivity rates are a key of labor supply due to large number of potential workers among this group. The article identifies trends in economic inactivity in Russia, characteristics of inactive people, and reasons for inactivity comparing inactivity rates in Russia and OECD countries. The text is based on the Russian Labor Force Survey data for 2013. Sickness and family responsibilities are the main difference in economic inactivity rates between men and women. Sickness and disability is a major reason for economic inactivity among men in working age while majority of women of the same age are inactive as a result of family/home responsibilities. Inactivity rates vary considerably by level of educational attainment. Employment potential of the Russian economically inactive people is low. Its increase suggests institutional and economic reformations aimed at increasing the employment rates of older workers and youth.
Using RLMS-HSE data set we analyze labor flows in the Russian labor market for 2000-2012. We document the high mobility rate and the transitive role played by non-participation. Division of all employed into three large groups (budgetary workers, workers in the corporate market sector, and employed in the non-corporate or informal sector) suggests that budgetary workers are low mobile compared to others, and informal workers and economically inactive individuals have higher probabilities to become unemployed than those who work formally. The paper exploits a few methodological approaches. First, we build transition matrices allowing estimate transition probabilities. Second, the Shorrocks indexes estimate intensity of mobility. Third, the dynamic multinomial logit model explores individual determinants of inter-status transitions and structural dependence from the previous labor market states. Fourth, we decompose the change in unemployment rate as the combination of incoming and outcoming flows. This procedure suggests that the decline in unemployment is explained by decrease in incoming flows while the outflows remain largely stable. Observed intensity and direction of flows fit the institutional configuration of the Russian labor market model.