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Informal Employment in Russia: Definitions, Incidence, Determinants and Labor Market Segmentation

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  • Hartmut Lehmann
  • Anzelika Zaiceva

Abstract

This paper takes stock of informal employment in Russia analyzing its incidence and determinants, developing several measures of informal employment and demonstrating that the incidence varies widely across the different definitions. We, however, show that the determinants of informal employment are roughly stable across the different measures. We also estimate an informal-formal wage gap at the means and across the entire wage distributions. We find only weak evidence for labor market segmentation in Russia for salaried workers but establish a segmented informal sector with a lower free entry tier and an upper rationed tier when including the self-employed and entrepreneurs

Suggested Citation

  • Hartmut Lehmann & Anzelika Zaiceva, 2014. "Informal Employment in Russia: Definitions, Incidence, Determinants and Labor Market Segmentation," Department of Economics (DEMB) 0031, University of Modena and Reggio Emilia, Department of Economics "Marco Biagi".
    • Handle: RePEc:mod:dembwp:0031
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    References listed on IDEAS

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    1. Thomas Dohmen & Melanie Khamis & Hartmut Lehmann, 2010. "Risk Attitudes and the Incidence of Informality among Workers: Evidence from a Transition Country," ESCIRRU Working Papers 22, DIW Berlin, German Institute for Economic Research.
    2. Lehmann, Hartmut & Muravyev, Alexander & Razzolini, Tiziano & Zaiceva, Anzelika, 2013. "The wage and non-wage costs of displacement in boom times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1184-1201.
    3. Lehmann, Hartmut & Razzolini, Tiziano & Zaiceva, Anzelika, 2011. "Job Separations and Informality in the Russian Labor Market," IZA Discussion Papers 6230, Institute of Labor Economics (IZA).
    4. H. Lehmann & A. Muravyev, 2012. "Labor Market Institutions and Informality in Transition and Latin American Countries," Working Papers wp854, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Pagés, Carmen & Rigolini, Jamele & Robalino, David A., 2013. "Social Insurance, Informality and Labor Markets: How to Protect Workers While Creating Good Jobs," IZA Discussion Papers 7879, Institute of Labor Economics (IZA).
    6. Hartmut Lehmann & Anzelika Zaiceva, 2013. "Informal Employment in Russia: Definitions, Incidence, Determinants and Labour Market Segmentation," OECD Economics Department Working Papers 1098, OECD Publishing.
    7. 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.
    8. V. Gimpelson & A. Zudina., 2011. "Informal Workers in the Russian Economy: Who Are They and How Many?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 10.
    9. Krstic, Gorana & Sanfey, Peter, 2007. "Mobility, poverty and well-being among the informally employed in Bosnia and Herzegovina," Economic Systems, Elsevier, vol. 31(3), pages 311-335, September.
    10. Henley, Andrew & Arabsheibani, G. Reza & Carneiro, Francisco G., 2009. "On Defining and Measuring the Informal Sector: Evidence from Brazil," World Development, Elsevier, vol. 37(5), pages 992-1003, May.
    11. Guillermo E. Perry & William F. Maloney & Omar S. Arias & Pablo Fajnzylber & Andrew D. Mason & Jaime Saavedra-Chanduvi, 2007. "Informality : Exit and Exclusion," World Bank Publications - Books, The World Bank Group, number 6730.
    12. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
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    14. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    15. Lehmann, Hartmut & Pignatti, Norberto, 2007. "Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine," IZA Discussion Papers 3269, Institute of Labor Economics (IZA).
    16. H. Lehmann & A. Zaiceva, 2013. "Informal Employment in Russia: Incidence, Determinants and Labor Market Segmentation," Working Papers wp903, Dipartimento Scienze Economiche, Universita' di Bologna.
    17. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    18. Karabchuk, Tatiana, 2012. "Informal employment in Russia: Why is it so sustainable?," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 13(2), pages 29-36.
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    Citations

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    Cited by:

    1. Anita Staneva & G Arabsheibani, 2014. "Is there an informal employment wage premium? Evidence from Tajikistan," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-24, December.
    2. Hartmut Lehmann, 2015. "Informal Employment in Transition Countries: Empirical Evidence and Research Challenges," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 57(1), pages 1-30, March.
    3. Gustavo A. García, 2017. "Labor Informality: Choice or Sign of Segmentation? A Quantile Regression Approach at the Regional Level for Colombia," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 985-1017, November.
    4. Mirkasimov, Bakhrom & Ahunov, Muzaffar, 2017. "Labor markets and informality: the case of Central Asia," MPRA Paper 78751, University Library of Munich, Germany.
    5. Lehmann, Hartmut & Pignatti, Norberto, 2018. "Informal employment relationships and the labor market: Is there segmentation in Ukraine?," Journal of Comparative Economics, Elsevier, vol. 46(3), pages 838-857.
    6. Sahoo, Bimal & Neog, Bhaskar Jyoti, 2015. "Heterogeneity and participation in Informal employment among non-cultivator workers in India," MPRA Paper 68136, University Library of Munich, Germany.
    7. Hartmut Lehmann & Anzelika Zaiceva, 2013. "Informal Employment in Russia: Definitions, Incidence, Determinants and Labour Market Segmentation," OECD Economics Department Working Papers 1098, OECD Publishing.
    8. Lehmann, Hartmut & Zaiceva, Anzelika, 2013. "Re-defining Informal Employment and Measuring its Determinants: Evidence from Russia," IZA Discussion Papers 7844, Institute of Labor Economics (IZA).
    9. Lilas Demmou & Andreas Wörgötter, 2015. "Boosting Productivity in Russia: Skills, Education and Innovation," OECD Economics Department Working Papers 1189, OECD Publishing.
    10. Duman, Anil, 2024. "The Diversity of Informal Employment: a survey of drivers, outcomes, and policies," OSF Preprints yg3t7, Center for Open Science.
    11. Duman, Anil, 2020. "Pay Gaps and Mobility for Lower and Upper Tier Informal Sector Employees: an investigation of the Turkish labor market," GLO Discussion Paper Series 655, Global Labor Organization (GLO).
    12. Gashi Ardiana & Williams Colin C., 2019. "Evaluating the Prevalence and Distribution of Unregistered Employment in Kosovo: Lessons from a 2017 Survey," South East European Journal of Economics and Business, Sciendo, vol. 14(1), pages 7-20, June.

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    More about this item

    Keywords

    Informal employment; transition economies; labor market segmentation; Russia;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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