Russias Workforce Development Study of the Global Policy Network GPN Informal Employment in Russia

1
Russias Workforce Development Study of the
Global Policy Network (GPN) Informal Employment
in Russia Oksana Sinyavskaya Daria Popova
Workforce Development and Skills Mismatch GPN
Seminar 21-23, June 2004, Johannesburg
2
GDP, GDP per capita and population growth rates
Source Russias State Statistics Agency
3
Sectoral composition of GDP over time (in current
prices)
Source Russias State Statistics Agency
4
Structure of annually employed population by type
of ownership of enterprise/organisation (,
total employment 100)
Source Russias State Statistics Agency
5
Share of population with incomes below
subsistence minimum (SM) measured using different
methodologies,
6
Poverty rates different estimates based on the
data of Russias State Statistics Agency
Source Russias State Statistics Agency
7
Differentiation of income and wages 1991
2003
Source Russias State Statistics Agency
8
General and registered unemployment by gender(
of labor force)
9
Structure of general (ILO) unemployment by
average duration of job search
10
Redistribution of employment across branches,
1990-2002 (thousand people)
11
Dynamics of growth rates (2000 100)
12
Share of hidden wages in total wages,
13
Data sources

• Labor Force Surveys (Russias State Statistics
  Agency - Goskomstat), quarterly, since 1999, N
  appr. 250-260 thousands respondents
• Population Survey on Social and Economic
  Situation of Russias Population (Carnegie Moscow
  Center), 2000, N 5000 households
• Russias Longitudinal Monitoring Survey
  (Institute of Sociology and Institute of
  Nutrition of Russian Academy of Sciences, and
  Paragon Research International), panel since
  1994, autumn of 1998-2001, N appr. 4500
  households (more than 10000 respondents)

14
Basic demographic characteristics of the samples
Adult population of Russia (18)
15
Informal employment

• in formal sector is a regular or occasional
  paid hired employment at an enterprise or in an
  organization based on verbal agreement
• in informal sector is a regular or occasional
  paid employment not for hire (self-employment,
  individual entrepreneurship) without a patent, a
  license or a registration, employment for hire
  outside an enterprise (an organization), in
  own-account enterprise on the basis of verbal
  agreement
• in sector of households is a regular or
  occasional non-paid employment aimed at
  production of goods for sale within a household

16
Empirical definitions 1Employment inside
informal sector

• CMC
• Own account workers (by self-identification)
• Individual entrepreneurs with paid employees
  (size of firm less than 5 workers)
• Paid-employees in private sector (size of firm
  less than 5 workers)

• RLMS
• Those working outside an enterprise or an
  organization (by self-identification), including
  own account workers, individual entrepreneurs
  with employees, family and domestic workers and
  farmers
• Paid-employees working at private enterprises or
  organizations (size of firm less than 5 workers)

17
Empirical definitions
Shadow economy informal labor relations in
formal sector
18
Empirical definitions 2Informal employment

• CMC
• Own account workers (by self-identification)
  without patent or license
• Individual entrepreneurs with paid employees
  working without a contract
• Paid-employees working on the basis of verbal
  agreements

• RLMS
• Those working not at enterprise or organization
  (by self-identification), including own account
  workers, individual entrepreneurs with employees,
  family and domestic workers and farmers
• Paid-employees working on the basis of verbal
  agreements at enterprises/organizations

19
Dynamics of main employment in informal sector
based on different approach to its definition
(thousand people)
20
Official estimates of employment inside informal
sector, 15-72 years (thousand people)
21
Structure of employment in informal sector in
2002, 15-72 years

• Rural 47,7
• Agricultural activities 42,1
• Self-employed 66,8
• Less than 5 employees 78,2

22
Share of informal employment among those with
regular and occasional employment, 4 quarters of
1998, 2000, and 2002
23
Share of informally employed among respondents
with regular and/or occasional employment, RLMS
2002 (15-72 years)
Total informal employment 19,2
N 4081
24
Dynamics of informal employment and employment in
informal sector, 15-72 years, RLMS data
25
Formal and informal primary employment, 15-72
years, RLMS panel data
N4711
26
Stability of informal employment, RLMS panel data
for 1998, 2000 and 2002 ??.
Sum of the area of 3 circles N 523 100
27
Matrices of informal employment and employment in
informal sector on main job (18 years), 4
q.-2000, CMC Survey ()
N2049
28
Matrices of informal employment and employment in
informal sector on main job (18 years), 4
q.-2000, RLMS (),
N2693
29
Gender composition of employment in informal
sector
30
Distribution of informal employment by gender,
secondary sociological data, 4 quarter 2000
31
Employment in informal sector and informal
employment by type of settlement, main job, 4
q.-2000
32
Informal employment in rural area composition
of per capita aggregate receipts by income groups
33
Distribution of informal employment at main job
by firm's size
34
Distribution of employment in informal sector and
informal employment by occupations, main job,
RLMS, 4 q.-2000
35
Distribution of employed informally or inside
informal sector by branches, main job
36
Conclusions

• Trends
• IE at least does not decrease
• Emp. in IS increases (individual entrepreneurs,
  domestics)

37
Conclusions (cont.)

• Structure
• Agricultural act. by LFS near 40
• Gender women do not prevail
• Less educated paid employees
• Services
• Workers, salesmen

38
Conclusions (cont.)

• Structure (cont.)
• Small new private firms
• Self-employment
• IE emp. in IS heterogeneous regular vs.
  occasional

39
Conclusions (cont.)

• Working Conditions Security
• Longer working hours
• Not subject to SS
• Only a few other social guarantees
• Better paid
• Not stable

40
Issues for future research

• Concepts of informal employment
• Formal, informal and self-employment,
• Informal employment outside informal enterprises,
• Informality within labor contracts,
• Working at home, on the streets, etc.,
• Informal employment in rural area,
• Policy implications
• Inequality in informal economy vulnerable
  groups,
• Social guarantees, wages/salaries, and working
  hours

41
Issues for future research (cont.)

• Data
• Comparability of empirical definitions used in
  surveys,
• Detailed questions / special survey on informal
  employment,
• Improving both qualitative and quantitative
  researches