Informal employment in service industries: estimations from nationally representative Labour Force Survey data of Russian Federation

ABSTRACT

As the largest post-Soviet transition economy with substantial labour immigration and a considerable informal-sector Russia serves as an interesting case to study informal employment in the service and non-service economic sectors. The study fills the gap of the lack of empirical papers grounded on the reliable massive individual data. This article discusses almost twenty years’ dynamics of informal employment rates within the service and non-service industries based on the nationally representative Labour Force Survey primary data, collected quarterly for 2010–2015 with a sample size of about 200 thousand respondents per quarter. The unexpected finding is that the rate of informal employment is higher in non-service economic activities. Informal workers in the service sector in Russia are typically male, not very young, without tertiary education, living in urban areas. The paper also provides a comparative regression analysis on the probability of being informally employed in the service and non-service sectors.

KEYWORDS:

• Service sector
• informal employment
• oral working arrangements
• non-registered self-employed
• Russian labour market

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. According to the ILO definition, informal employment includes the total number of informal jobs, whether carried out in formal-sector enterprises, informal-sector enterprises, or households, during a given reference period (ILO, 2011). We are not following the enterprise-sector approach to avoid the double counting for employment in the informal sector and informal employment within the industries. Moreover, we consider the job-based approach to informal employment as the most suitable to discuss the probability of having an informal (unregistered) job, as well as when we speak about workers’ characteristics comparing the service and non-service sectors. We are in line with other previous studies which concentrate only on informal employment (Gimpelson & Zudina, 2011; Lehmann & Muravyev, 2011; Lehmann & Zaiceva, 2013; Lehmann, Razzolini, & Zaiceva, 2012; Slonimczyk, 2013).

2. Retirement starts at 60 for men and 55 for women in Russia.