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Working paper

Рост производительности труда, структурные сдвиги и неформальная занятость в российской экономике

The paper explores the relationship between structural change and labour productivity growth of the Russian economy. Structural change is considered as the outcome of labour reallocation between industries as well as between formal and informal segments within industries. Using the shift-share analysis, we decompose aggregate labour productivity growth into contributions of intra-industry growth (“within” effects) and the growth due to labour reallocation (“between” effects). For this we use four alternative methods of the shift share analysis, which differ by initial assumptions and economic interpretation, using official Russian statistics of the informal economy and the Russia KLEMS dataset.   This is the first study that applies alternative methods of the shift-share analysis to estimation of labour reallocation contribution to labour productivity growth, taking into account informality. Moreover, the present research explores, for the first time, the impact of expanding informal segment on labour productivity growth of the Russian economy. All methods provide consistent results and demonstrate that the total labour reallocation has been growth enhancing though the informality expansion has had the negative effect. As our study suggests, it is caused by growing variation in productivity levels across industries, which is also known as the Denison effect.