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Informal Economy Activities and Entrepreneurship in Russia

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  • Kim, Byung-Yeon

Abstract

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.

Suggested Citation

  • Kim, Byung-Yeon, 2010. "Informal Economy Activities and Entrepreneurship in Russia," Proceedings of the German Development Economics Conference, Hannover 2010 55, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec10:55
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    References listed on IDEAS

    as
    1. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
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    6. Byung‐Yeon Kim & Youngho Kang, 2009. "The informal economy and the growth of small enterprises in Russia1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(2), pages 351-376, April.
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    Keywords

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    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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