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The Effects of the Informal Sector on Income of the Poor in Russia

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  • Yuriy Timofeyev

Abstract

This paper clarifies the social and economic effects of employment in the informal sector on the poor in Russia in recent years. The article describes the extent to which the figures for informal sector at large and unofficial employment in particular vary in different estimates and the effect they have on the average labor income of the poor. The major impact of the research consists of the development of a universal method for the estimation of the scales of labor income of the poor in the informal sector. Using the latest available data from Russian Federal State Statistics Service, this indicator is calculated for the poor and than compared with average wages in the formal sector and the subsistence minimum (official poverty line). The study concludes that the informal sector is a factor of social stability in a postsocialist transition economy, which, however, cannot alleviate poverty. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Yuriy Timofeyev, 2013. "The Effects of the Informal Sector on Income of the Poor in Russia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 111(3), pages 855-866, May.
    • Handle: RePEc:spr:soinre:v:111:y:2013:i:3:p:855-866
    DOI: 10.1007/s11205-012-0037-5
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    1. Simon Johnson & Daniel Kaufman & Andrei Shleifer, 1997. "The Unofficial Economy in Transition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 159-240.
    2. I. Maslova & T. Baranenkova, 2003. "Informal Employment in Russia," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 9.
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    4. Chen, Martha Alter. & Jhabvala, Renana. & Lund, F. J., 2002. "Supporting workers in the informal economy : a policy framework," ILO Working Papers 993541733402676, International Labour Organization.
    5. Byung–Yeon Kim, 2002. "The participation of Russian households in the informal economy: Evidence from the VTsIOM data," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(3), pages 689-717, November.
    6. I. Maslova & T. Baranenkova., 2003. "Informal Employment in Russia," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 9.
    7. Byung‐Yeon Kim, 2005. "Poverty and informal economy participation," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(1), pages 163-185, January.
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    9. Kaufmann, Daniel & Kaliberda, Aleksander, 1996. "Integrating the unofficial economy into the dynamics of post-socialist economies : a framework of analysis and evidence," Policy Research Working Paper Series 1691, The World Bank.
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    Cited by:

    1. Thi Hong Hanh Pham, 2022. "Shadow Economy and Poverty: What Causes What?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 861-891, December.

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    More about this item

    Keywords

    Informal Sector; Labor income of the poor; Russia; C23; I26; I3; O17; P36;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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