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The Impact of Economic Factors on the Employment Rate in the Informal Sector: Regional Aspect

Author

Listed:
  • Natalia Leonidovna Simutina

    (Far Eastern State Agrarian University)

  • Nikolay Nikolaevich Leventov

    (Far Eastern State Agrarian University)

  • Olga Petrovna Puzikova

    (Far Eastern State Agrarian University)

Abstract

The article attempts to estimate the impact of economic factors on the employment rate in the informal sector among Russian federal subjects based on the dynamic model. To make calculations the authors used panel data on federal subjects. All subjects were divided into 3 groups based on the rate of employment in the informal sector in 2015: first group (19 subjects) – regions with minimal employment rate, second (39) – average employment rate, third (19) – maximal employment rate. The authors used the following factors for assessment: demand factors – income level in the region, vacancies; supply factors – unemployment or characteristic of employment; institutional factor – level of taxation. Based on the calculations the authors make following conclusions. The most impactful factors are demand-based. The negative connection between GRP per capita and the informal sector is statistically confirmed. The increase in supply of work positions in the formal sector decreases the rate of employment in the informal sector, which is especially important for the third group of regions with the maximal level of informal employment that have ‘compelled entrepreneurship’. The article also statistically confirms the high inertia of rate of the employed in the informal sector

Suggested Citation

  • Natalia Leonidovna Simutina & Nikolay Nikolaevich Leventov & Olga Petrovna Puzikova, 2018. "The Impact of Economic Factors on the Employment Rate in the Informal Sector: Regional Aspect," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 83-100.
    • Handle: RePEc:far:spaeco:y:2018:i:1:p:83-100
    DOI: 10.14530/se.2018.1.083-100
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    References listed on IDEAS

    as
    1. Andreas Buehn & Friedrich Schneider, 2012. "Shadow economies around the world: novel insights, accepted knowledge, and new estimates," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(1), pages 139-171, February.
    2. Hazans, Mihails, 2011. "Informal Workers across Europe: Evidence from 30 Countries," IZA Discussion Papers 5871, Institute of Labor Economics (IZA).
    3. Slonimczyk, Fabian, 2011. "The effect of taxation on informal employment: evidence from the Russian flat tax reform," MPRA Paper 35404, University Library of Munich, Germany.
    4. Ceyhun Elgin & Friedrich Schneider, 2016. "Shadow Economies in OECD Countries: DGE vs. MIMIC Approaches," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 30(1), pages 51-75.
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    Cited by:

    1. Anzhelika Viktorovna Karpushkina & Irina Valentinovna Danilova & Svetlana Vladimirovna Voronina & Irina Petrovna Savelieva, 2021. "Assessing the Impact of Employment in the Informal Sector of the Economy on Labor Market Development," Sustainability, MDPI, vol. 13(15), pages 1-15, July.

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    More about this item

    Keywords

    employment in the informal sector; economic factors; dynamic panel model; labor demand; labor supply; institutional factors; Russian federal subject;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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