OECD Economics Department Working Papers

ISSN :
1815-1973 (online)
DOI :
10.1787/18151973
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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

 

Informal Employment in Russia

Definitions, Incidence, Determinants and Labour Market Segmentation You or your institution have access to this content

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Author(s):
Hartmut Lehmann1, Anzelika Zaiceva2
Author Affiliations
  • 1: University of Bologna, Italy

  • 2: University of Modena, Italy

Publication Date
04 Dec 2013
Bibliographic information
No.:
1098
Pages
47
DOI
10.1787/5k3v1tqzmzg7-en

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This paper takes stock of informal employment in Russia analysing its incidence and determinants. Using the regular 2003-11 waves and an informality supplement of the Russian Longitudinal Monitoring Survey (RLMS) it develops several measures of informal employment and demonstrates that the incidence varies widely across the different definitions. We also show that the determinants of informal employment are roughly stable across the different measures: workers who are males, relatively young, unskilled and employed in construction and trade and related services have a higher likelihood to have an informal job. We also take a look at the issue of labour market segmentation along the informal-formal divide by estimating an informal-formal wage gap at the means and across the entire wage distributions. We find only weak evidence for labour market segmentation in Russia when estimating an informal-formal wage gap for salaried workers at the mean. The results of quantile regressions show a wage penalty in the lower half of the distribution and no gap in the upper half for informal employees. In contrast, informal self-employed and entrepreneurs have conditional mean wages that are higher than the mean wages for the formally employed. Across the entire wage distribution, however, we find a negative wage gap in the lowest quartile and a strongly positive wage gap in the highest quartile, pointing to a segmented informal sector with a lower free entry tier and an upper rationed tier. This Working Paper relates to the 2014 OECD Economic Survey of the Russian Federation (www.oecd.org/eco/surveys/russia).
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: Economic Systems / Socialist Systems and Transitional Economies / Factor and Product Markets; Industry Studies; Population