Informal employment in Russia: Why is it so sustainable

Introduction
The problem of informal employment (or employment in the informal sector) has been widely discussed all over the world for more than 40 years. Following the definitions of Keith Hart (1973), ILO launched the concept of the informal sector, and in 1993 the informal sector was included on the agenda of the 15th International Conference of Labour Statisticians (ICLS). Initially, informal employment was seen predominantly as a phenomenon of developing countries (Marrick, 1976; Portes, 1994; Saavedra, 1999), but later its importance was also recognised in developed European countries (Portes, Sassen-Koob, 1987; Sassen, 1997; Williams, Windenbank, 1998) and in particular for post-socialist countries (Braithtwaite, 1995; Guarigla, Byung-Yeon, 2001; Barnabe, 2002, Gimpelson, 2002, 2006; Lehmann, Pignatti, 2008) where the strict labour laws are accompanied by their non-effective enforcement. In Russia’s case, according to Rosstat (The Russian Federation Committee on Statistics) the number of those informally employed in Russia has been growing since 19991,from less than 2.5 million to about 14 million workers in 2009. Informal employment became a safety net during the shock therapy of the 1990s in Russia (Varshavskaya, 2002; Gimpelson, 2002; Barsukova, 2003; Kubishin, 2003; Sinyavskaya, 2005; Kapelyushinokov, 2006). It was away to earn money when the country’s wage arrears were deepening and was a survival strategy for those enterprises bound by the rigid legislation in the drastically changing economic climate. Interestingly, we do not see a downward tendency for the informal employment rates during the years of economic growth and after the partial liberalisation of the labour laws (2002). Why is the informal sector in Russia so sustainable both in good and bad times? This paper is aimed at reviewing the existing publications on the informal employment in Russia and investigating the following issues: What are the scale and dynamics of informal employment over the last ten years? What is the structure of informal employment? Why was there no decline in informal employment rates in Russia during the years of economic growth?
Most economists studying Russian informal employment focus upon its scale and scope, the structure and the reasons for informal employment, (Gimpelson, 2002, Varshavskaya, Donova, 2003; Sinyavskaya, 2005; Kapelyushnikov, 2006; Gimpelson, Zudina, 2011; Karabchuk, Nikitina, 2011) whereas sociologists address the effect of informal employment upon the Russian economy and the social mechanisms of its formation (Fadeeva, 2001; Barsukova,2000, 2003, 2004; Zaslavskaya, 2002; Latov et al, 2005). This paper deals with the main approaches and definitions of informal employment, data sources and measurement, the scale and scope of the informal employment, and the reasons for its sustainable growth.

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