Productivity Growth, Structural Change and Informality: The Case of Russia
This study considers the influence of structural change on aggregate labour productivity growth of the Russian economy. The term "structural change" refers to labour reallocation both between industries and between formal and informal segments within an industry. Using Russia KLEMS and official Rosstat data we decompose aggregate labour productivity growth into intra-industry (within) and between industry effects with four alternative methods of the shift-share analysis. All methods provide consistent results and demonstrate that total labour reallocation has been growth enhancing though the informality expansion has had a negative effect. As our study suggests, it is caused by growing variation in productivity levels across industries.
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