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Informal Economy Activities and Entrepreneurship in Russia

  • Kim, Byung-Yeon

This paper uses the Russian Longitudinal Monitoring Survey (RLMS) from 1998 to 2004 to analyze the effect of previous informal economy activities on the creation of official entrepreneurship. We find that previous participation in the informal economy is positively associated with the probability to become registered entrepreneurs in the present. We also find that that self-employment is used as a transition mechanism to entrepreneurship and moonlighters in the past are more active in actual job changes. Furthermore, a survival function analysis suggests that previous experience as self-employed moonlighters enhances the probability of success as official entrepreneur. Workers who moonlighted as selfemployed in the past represent 16-22% of the new entrepreneurs.

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Hannover 2010 with number 55.

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Date of creation: 2010
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Handle: RePEc:zbw:gdec10:55
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  1. Blanchflower, D.G. & Oswald, A., 1991. "What Makes an Entrepreneur?," Economics Series Working Papers 99125, University of Oxford, Department of Economics.
  2. Byung-Yeon Kim & Youngho Kang, 2009. "The informal economy and the growth of small enterprises in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(2), pages 351-376, 04.
  3. Erik Hurst & Annamaria Lusardi, 2004. "Liquidity Constraints, Household Wealth, and Entrepreneurship," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 319-347, April.
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