<%Language="VBScript" Response.Write "" %>
<%Language="VBScript" Response.Write "print" %>

Research Programs / Projects

Labor Market Policy in the Context of Globalization: Informal Employment
Workforce Development Study of the Global Policy Network

Head: Cand.Sc. T. Maleva

Duration: August 2003 – June 2004

Support: Economic Policy Institute (Washington, USA) – coordinator Global Policy Network (GPN), Funds resource – Ford Foundation grant.

Participants: Cand.Sc. O. Sinyavskaya, (Project Executor ), Cand.Sc. D. Popova

Partners: Economic Policy Institute (USA); Cairo University (Egypt), FUNDE - National Foundation for Development (El Salvador), Institute of Applied Manpower Research (India), NALEDI - National Labour & Economic Development Institute (South Africa), WIEGO - Women in Informal Employment Globalizing and Organizing

Objective

The project is aimed at the study of changes in the quantity and the structure of formal and informal employment, including the results of economic reforms, such as liberalization, policy of export-oriented growth, privatization, including the privatization of the service sector (housing and community service, electrical energy, pension fund scheme, health care system, etc.)

Results of the Project

In the context of the project informal employment is determined as unregistered (i.e. based on verbal agreements) employment in formal and informal sectors. Lack of contract distinguishes informal employment from the shadow one, when the verbal agreements on conditions and remuneration of labor are established besides the labor contract in force. Simultaneously, the informal employment is not identical to the employment in the informal sector, inasmuch as in the first case informality is attributed to the form of labor relations, and in the second case – to the type of production unit (enterprise).

Empirical base of the research consists of the Survey of Socio-Economical Situation of the Population accomplished by the Carnegie Moscow Center and Russian Longitudinal Monitoring Survey (1998, 2000 and 2002 waves).

The estimations of the population involvement in the informal employment are close to the conservative estimations of this phenomenon made by other researches on the base of the All-Russian Public Opinion Research Center (VCIOM) surveys and cover from 17 to 22 % of respondents aged 15-72 years, having regular or occasional work in the period of 1998-2002. Primary informal employment varies, accordingly, from 12 to 16% of mentioned multitude. At the same time, the data used allows to note that the scale of informal employment, at least didn’t reduced.

Nevertheless, analysis of observations for separate years didn’t allow considering the dynamics of the studied phenomenon. Do the approximately equal scales of the informal employment testify the availability of any stable majority of individuals, resorting to this type of employment? To answer this question we used the RLMS panel data, including respondents, participating in the inquiries in 1998, 2000 and 2002, who in 2002 were 15 years old and upwards. The obtained results, at first, confirmed the informal employment expansion, first of all due to the increase of number of individuals, working without any contract (their quota in the number of population at the age of 15-72 years, included into panel, increased for 4 years from 0,6% up to 1,4%). And at second, turned out that the majority of the respondents the informal employment was a temporary position, lasting for not more than a year. Just 32% of informal employees in 1998 kept this position in 2000, and only 39% of them didn’t change their position in 2002. The main body, i.e. those individuals who were informally employed in 1998, 2000 and 2003 and for whom this form of employment was, evidently, permanent, constituted merely 6,7%. The most significant flow-out from the informal employment sector occurs to the formal employment, while the leader among the informal employment “providers” is a group of non-employed respondents. All these facts suggest that the informal employment for an employee is unstable situation.

The study of the socio-demographic features of the informally employed, conditions and forms of their employment and remuneration of their labor allows to conclude that this group is rather heterogeneous and to distinguish at least three (or even four) categories: informally employed at the main regular job (with possible exclusion from this number those self-employed and private entrepreneurs as the most active and successful group), individuals with the only occasional informal work and secondary informally employed.

The informal regular employment is typical mainly for middle able-to-work ages inhabitants of metropolises, college and university educated (the last is typical for heads of firms). On the contrary, the informal casual employment as the only source of income is concentrated in the rural area, in extreme age groups and among worst educated.

Differences in the level and quality of human capital of these categories of informally employed are reflected in the level of their remuneration: those for whom informal employment is casual are paid the least. Nevertheless, in this group, lower labor incomes are compensated by availability of non-labor income (pensions, scholarships, allowances, unemployment benefits, and other social payments). For all that, unlike formally employed, those who are employed informally receive their wages/salaries, as a rule, regularly and on time.

Strong residential differentiation of the prevalence of the forms of informal employment in question allows assuming that scale and character of informal employment are violently influenced by demand related factors. Actually, regular informal employment is concentrated first of all, in the sphere of retail trading, and also in construction, turnovers in which are determined by solvent demand of population (it is higher in metropolises). Agrarian informal employment, which evidently bears involuntary character, is most of all extended in small towns and rural area. As a whole, informal employment is presumably associated with the new private sector, micro enterprises and private entrepreneurs, as well as self-employment.

In the context of the present project the IISP has established cooperation with organizations – members of the Global Policy Network, including such countries as Egypt, India, El Salvador, the Republic of South Africa and also the GPN coordinator – Economic Policy Institute (Washington, USA).

The Project results were represented at the IISP second annual academic conference, the State University – Higher School of Economics Fifth International Conference and discussed at the IISP workshops, in which the wide range of experts dealing with the problems of employment and informal economic sector participated. Besides, the presentation of the present IISP project results, which took place at the International Workforce Development Study Conference, 21-23, June, 2004, Johannesburg, obtained high estimation of all the participants.

Joint monograph collecting the results from each of the participated county (Egypt, India, Russia, Salvador, the Republic of South Africa) has been published in English in February 2005 (See http://www.epi.org/content.cfm/books_good_jobs). O. Sinyavskaya took part in the presentation of this monograph in Washington DC on March 1, 2005.

The IISP is going to publish the working paper summarizing the results of the Russian project in Russian on Autumn 2005.

The English version of the paper can be downloaded here.

Project News

June 21-23, 2004, Johannesburg, RSA, the conference summing up the results of the first stage of the International Project “Workforce Development Study for the Global Policy Network” implementation took place. Representatives of the countries – members of the project (Egypt, India, Russia, Salvador, the Republic of South Africa and also USA – coordinator of the project) participated in the conference. Researchers from Ghana, Kenya, Brazil and Ford Foundation representatives took part in the conference either. Russia was represented by the IISP colleagues - Cand.Sc. O. Sinyavskaya, Cand.Sc. D. Popova, and PhD. M.Moskvina – General Director, Analytical Center for Social Partnership Development (CCAER).
See IISP presentation (PowerPoint, 4.9Mb).