Job Separations, Job Loss and Informality in the Russian Labor Market

Quaderni DSE Working Paper No. 800

52 Pages Posted: 12 Dec 2011

See all articles by Hartmut Lehmann

Hartmut Lehmann

University of Bologna - School of Economics, Management, and Statistics; IZA Institute of Labor Economics

Tiziano Razzolini

University of Siena

Anzelika Zaiceva

University of Modena and Reggio Emilia; IZA Institute of Labor Economics

Date Written: December 12, 2011

Abstract

Having unique data we investigate the link between job separations (displacement and quits) and informal employment, which we define in several ways posing the general question whether the burden of informality falls disproportionately on job separators in the Russian labor market. After we have established positive causal effects of displacement and quits on informal employment we analyze whether displaced workers experience more involuntary informal employment than their non-displaced counterparts. Our main results confirm our contention that displacement entraps some of the workers in involuntary informal employment. Those who quit, in turn, experience voluntary informality for the most part, but there seems a minority of quitting workers who end up in involuntary informal jobs. This scenario does not fall on all the workers who separate but predominantly on workers with low human capital. We also pursue the issue of informality persistence and find that informal employment is indeed persistent as some workers churn from one informal job to the next. Our study contributes to the debate in the informality literature regarding segmented versus integrated labor markets. It also contributes to the literature on displacement by establishing informal employment as an important cost of displacement. We also look at the share of undeclared wages in formal jobs and find that these shares are larger for separators than for incumbents, with displaced workers bearing the brunt of this manifestation of informality.

Keywords: job separations, worker displacement, informality, Russia

JEL Classification: J64, J65, P50

Suggested Citation

Lehmann, Hartmut F. and Razzolini, Tiziano and Zaiceva, Anzelika, Job Separations, Job Loss and Informality in the Russian Labor Market (December 12, 2011). Quaderni DSE Working Paper No. 800. Available at SSRN: https://ssrn.com/abstract=1971228 or http://dx.doi.org/10.2139/ssrn.1971228

Hartmut F. Lehmann (Contact Author)

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Tiziano Razzolini

University of Siena ( email )

Via Banchi di Sotto, 55
Siena, 53100
Italy
+393493277244 (Phone)

Anzelika Zaiceva

University of Modena and Reggio Emilia ( email )

Viale A. Allegri 9
Modena, Modena 42121
Italy

IZA Institute of Labor Economics ( email )

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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