Stemming Russia’s Informality : Unearthing Causes and Developing Solutions
Growing informal employment in Russia raises concerns about fiscal sustainability, productivity, and social protection. Cutting through various data and definitions, this report finds one consistent outcome: informal employment is on the rise. As o...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/104631559937117457/Stemming-Russia-s-Informality-Unearthing-Causes-and-Developing-Solutions http://hdl.handle.net/10986/31883 |
| Summary: | Growing informal employment in Russia
raises concerns about fiscal sustainability, productivity,
and social protection. Cutting through various data and
definitions, this report finds one consistent outcome:
informal employment is on the rise. As of 2016, Russia’s
informal employment was estimated to range between 15.1 and
21.2 percent. The fiscal loss of underpayment by informal
workers is estimated at between 1 to 2.3 percent of GDP.
However, Russia’s share of informal employment is not that
high when compared to other middle-income countries. In
fact, countries such as Kazakhstan and Turkey, who have a
similar GDP per capita as Russia, exhibit higher informal
employment rates – 30 and 33 percent, respectively. Informal
employment is a pervasive phenomenon in Russian labor
markets, and its growth cannot be solely attributed to
changes in the sectoral or demographic composition of the
labor force. Rather, informality appears to have been
growing across all sectors and particularly among workers
without at least some tertiary education. Migrants tend to
be more informal: the 2016 share of informal migrant workers
(only partially captured in the surveys) was 26.2 percent,
versus 15.7 percent of Russian workers. The increase in
informality is attributed mainly to the lack of formal job
creation, which in recent years, was close to zero. The
report focuses on three aspects that affect informality:
labor market regulations; taxes and benefits; and labor mobility. |
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