BOFIT Viikkokatsaus / BOFIT Weekly 2019/42

A just-released survey from the Russian Presidential Academy of National Economy finds that about 25 million Russians participate in the grey labour market (i.e. work without an official labour contract, receive part of their salary under the table or moonlight). The survey finds that the share of persons participating in the grey labour market contracted sharply over the past two years, largely because of a decline in moonlighting. Russians now engage much less in off-the-books extra work as the opportunities for such arrangements have become scarcer. Due to country’s modest economic development past years, Russian households have needed to cut also from buying informal work and services. In contrast, the number of people who work full-time in the informal market has hardly changed in recent years. Moreover, the survey suggests that the attitude of Russians towards moonlighting has become more positive.

A World Bank report published this summer found that the share of Russians working without an official contract has risen steadily throughout the 2000s. The share is estimated to be in the range of 15–20 % of the employed. This percentage is not particularly high compared to other countries with similar income levels. Growth in informal employment in Russia’s case is driven largely by the fact that there has been almost no net job creation in Russia’s formal sector for the last decade. The report said that grey labour markets could be reduced through such measures as easing labour mobility between regions, relaxing labour market regulations and raising the education level of the workforce.