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Earnings inequality and informal employment in Russia

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  • Anna Lukiyanova

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type="main" xml:id="ecot12069-abs-0001"> In this paper, we explore the relationship between informality and earnings inequality using the data from the Russia Longitudinal Monitoring Survey (RLMS-HSE) for 2000–2010. We determine that during the entire period, earnings inequality was substantially higher in the informal sector. Informality increases earnings polarization, widening both tails of the earnings distribution. Nonetheless, inequality has declined in both formal and informal sectors. In the formal sector, changes in the distribution of monthly earnings between 2000 and 2010 were primarily generated by changes in the distribution of hourly earnings. In the informal sector, reduction of variation in monthly earnings went through two channels: declining differences in hourly rates and considerable compositional shifts within the informal sector. The results point to the importance of distributional analysis of earnings gaps and explicit accounting for the sector choice.

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  • Anna Lukiyanova, 2015. "Earnings inequality and informal employment in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 469-516, April.
    • Handle: RePEc:bla:etrans:v:23:y:2015:i:2:p:469-516
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    2. Adoho, Franck M. & Doumbia, Djeneba, 2022. "Informal Sector Heterogeneity and Income Inequality: Evidence from The Democratic Republic of Congo," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(4), pages 55-77, December.
    3. Colin C. Williams & Ioana A. Horodnic, 2017. "Explaining participation in the undeclared economy in Central and Eastern Europe: a demand-side approach," Post-Communist Economies, Taylor & Francis Journals, vol. 29(3), pages 297-312, July.
    4. Anna Lukiyanova & Nina Vishnevskaya, 2016. "Decentralisation of the minimum wage setting in Russia: Causes and consequences," The Economic and Labour Relations Review, , vol. 27(1), pages 98-117, March.
    5. Polina Kozyreva & Klara Sabirianova Peter, 2015. "Economic change in Russia: Twenty years of the Russian Longitudinal Monitoring Survey," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 293-298, April.
    6. Vladimir Hlasny, 2022. "Household Earnings in Putin’s Russia: Distributional Changes across Socioeconomic Groups, 2000–2016," LIS Working papers 847, LIS Cross-National Data Center in Luxembourg.
    7. Olivia Hye Kim, 2021. "Does income shock affect informal employment? Evidence from Russia," International Journal of Manpower, Emerald Group Publishing Limited, vol. 42(7), pages 1304-1320, March.
    8. Bargain, Olivier & Etienne, Audrey & Melly, Blaise, 2021. "Informal pay gaps in good and bad times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 693-714.

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