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Labour Supply in the Informal Economy in Russia during Transition

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  • Kolev, Alexandre
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    Abstract

    This paper investigates the informal labour market in Russia in late 1995 and estimates a labour supply function in the informal sector using nationally representative micro-data from the Russian Longitudinal Monitoring Survey, Round VI. The findings show that the informal economy constitutes a considerable source of additional income for many families, though it is associated with a large degree of wage and gender inequality. Informal job holding appears to be a safety valve for several individuals rationed in the regular labour market, either unemployed or experiencing compulsory periods of unpaid leave. At the same time, however, the data provides little support for the fact that wage arrears and low earnings from the regular economy increase the probability to join the informal sector. There are substantial gender differences in how demographic and market factors influence the attitudes towards informal activities. For men, the labour supply curve in the informal labour market is forward sloping, but the informal wage does not seem particularly significant for women.

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    Bibliographic Info

    Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2024.

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    Date of creation: Nov 1998
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    Handle: RePEc:cpr:ceprdp:2024

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    Related research

    Keywords: informal economy; Labour Supply; Russia;

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    Cited by:
    1. Linz, Susan J., 2004. "Motivating Russian workers: analysis of age and gender differences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(3), pages 261-289, July.
    2. Maxim Bouev, 2005. "State Regulations, Job Search and Wage Bargaining: A Study in the Economics of the Informal Sector," William Davidson Institute Working Papers Series wp764, William Davidson Institute at the University of Michigan.
    3. Sabine Bernabe, 2002. "Informal employment in countries in transition: a conceptual framework," LSE Research Online Documents on Economics 6389, London School of Economics and Political Science, LSE Library.
    4. Arabsheibani, Reza & Staneva, Anita V., 2012. "Is There an Informal Employment Wage Premium? Evidence from Tajikistan," IZA Discussion Papers 6727, Institute for the Study of Labor (IZA).
    5. World Bank, 2003. "Bosnia and Herzegovina : Poverty Assessment, Volume 1. Main Report," World Bank Other Operational Studies 14693, The World Bank.
    6. Maxim Bouev, 2002. "Official Regulations and the Shadow Economy: A Labour Market Approach," William Davidson Institute Working Papers Series 524, William Davidson Institute at the University of Michigan.

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