Re-Defining Informal Employment and Measuring its Determinants: Evidence from Russia

43 Pages Posted: 4 Jan 2014

See all articles by Hartmut Lehmann

Hartmut Lehmann

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

Anzelika Zaiceva

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

Abstract

Informal activities impact countries' economic development and overall growth. However, studying informal employment is not easy and it is crucial to provide a valid definition of it. This paper contributes to the recent discussion of the measures of informality by taking advantage of a rich dataset on Russia over the period 2003 - 2011, that is before and after the economic downturn, together with a special supplement on informality that allows to construct different measures of informal employment and to analyze its determinants. We demonstrate that the incidence of informal employment varies across the different definitions. However, the determinants of informal employment are roughly stable across the different measures as long as we exclude firm size as a criterion. We also show that risk-averse individuals, as expected, are less likely to select themselves into informal employment.

Keywords: informal employment, definitions, incidence, determinants, Russia

JEL Classification: J31, J40, P23

Suggested Citation

Lehmann, Hartmut F. and Zaiceva, Anzelika, Re-Defining Informal Employment and Measuring its Determinants: Evidence from Russia. IZA Discussion Paper No. 7844, Available at SSRN: https://ssrn.com/abstract=2374625

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

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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