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Labour Supply in the Informal Economy in Russia during Transition

Author

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  • Kolev, Alexandre

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.

Suggested Citation

  • Kolev, Alexandre, 1998. "Labour Supply in the Informal Economy in Russia during Transition," CEPR Discussion Papers 2024, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:2024
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    Citations

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    Cited by:

    1. World Bank, 2003. "Bosnia and Herzegovina : Poverty Assessment, Volume 1. Main Report," World Bank Other Operational Studies 14693, The World Bank.
    2. 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.
    3. Gustavo A. García, 2017. "Labor Informality: Choice or Sign of Segmentation? A Quantile Regression Approach at the Regional Level for Colombia," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 985-1017, November.
    4. Bernabe, Sabine, 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.
    5. 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.
    6. Iryna Kryvoruchko, 2015. "Russia's flat tax reform: redefining its effects on employment," Post-Communist Economies, Taylor & Francis Journals, vol. 27(2), pages 188-204, June.
    7. 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.
    8. Anita Staneva & G Arabsheibani, 2014. "Is there an informal employment wage premium? Evidence from Tajikistan," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-24, December.

    More about this item

    Keywords

    informal economy; Labour Supply; Russia;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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