Informality in the Russian Labor Market: What Do Alternative Definitions Tell Us?

According to the existing literature, informality rates for Russia vary in a wide range from slightly more than 5 to nearly 30%. The question arises: what are the causes and consequences of such a huge variation? Using RMLS data for 2009 the author investigates the degree of congruence between several alternative definitions of the informal employment in the context of the Russian labor market. Analysis shows that depending on empirical definitions informality rates considerably differ - from 11 to 24%. With different approaches not only the scale of the informal employment but also its socio-demographic profile radically changes. Furthermore, the econometric analysis reveals that the conditional impact of particular factors on the risk of informality varies considerably from one definition to another. This suggests that the existing estimates of the informal employment for Russia could hardly be regarded as methodologically robust.