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The Effects of the Informal Sector on Income of the Poor in Russia

  • Yuriy Timofeyev

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    This paper clarifies the social and economic effects of employment in the informal sector on the poor in Russia in recent years. The article describes the extent to which the figures for informal sector at large and unofficial employment in particular vary in different estimates and the effect they have on the average labor income of the poor. The major impact of the research consists of the development of a universal method for the estimation of the scales of labor income of the poor in the informal sector. Using the latest available data from Russian Federal State Statistics Service, this indicator is calculated for the poor and than compared with average wages in the formal sector and the subsistence minimum (official poverty line). The study concludes that the informal sector is a factor of social stability in a postsocialist transition economy, which, however, cannot alleviate poverty. Copyright Springer Science+Business Media B.V. 2013

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    File URL: http://hdl.handle.net/10.1007/s11205-012-0037-5
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    Article provided by Springer in its journal Social Indicators Research.

    Volume (Year): 111 (2013)
    Issue (Month): 3 (May)
    Pages: 855-866

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    Handle: RePEc:spr:soinre:v:111:y:2013:i:3:p:855-866
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    1. Irina Merkuryeva, 2006. "Informal Employment in Russia: Combining Disadvantages and Opportunities," CERT Discussion Papers 0606, Centre for Economic Reform and Transformation, Heriot Watt University.
    2. Nikopour, Hesam & Shah Habibullah, Muzafar, 2010. "Shadow Economy and Poverty," MPRA Paper 23599, University Library of Munich, Germany.
    3. Simon Johnson & Daniel Kaufman & Andrei Shleifer, 1997. "The Unofficial Economy in Transition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 159-240.
    4. I. Maslova & T. Baranenkova., 2003. "Informal Employment in Russia," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 9.
    5. Anders ├ůslund & Peter Boone & Simon Johnson, 1996. "How to Stabilize: Lessons from Post -communist Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(1), pages 217-314.
    6. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    7. Lemieux, Thomas & Fortin, Bernard & Frechette, Pierre, 1994. "The Effect of Taxes on Labor Supply in the Underground Economy," American Economic Review, American Economic Association, vol. 84(1), pages 231-54, March.
    8. Kaufmann, Daniel & Kaliberda, Aleksander, 1996. "Integrating the unofficial economy into the dynamics of post-socialist economies : a framework of analysis and evidence," Policy Research Working Paper Series 1691, The World Bank.
    9. Anderson, James H., 1998. "The size, origins, and character of Mongolia's informal sector during the transition," Policy Research Working Paper Series 1916, The World Bank.
    10. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-20, July.
    11. Dimova, Ralitza & Gang, Ira N. & Landon-Lane, John, 2005. "The Informal Sector During Crisis and Transition," Working Paper Series RP2005/18, World Institute for Development Economic Research (UNU-WIDER).
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