BOFIT Viikkokatsaus / BOFIT Weekly 2022/01
The 2020 recession was brief and rather shallow, causing the number of employed persons to decline by a relatively moderate 2–2.5 %. Employment has been on a recovery path for over a year now. Since last summer the number of employed persons has been slightly over 72 million, i.e. roughly at 2019 levels before the slump caused by pandemic and a drop in oil prices.
The recovery has come mainly from reviving employment in wholesale and retail, hotels and restaurants, construction, as well as education and manufacturing, i.e. the same branches that shed the most jobs during the depths of the 2020 recession.
Russia’s informal labour market has been particularly flexible. According to Rosstat’s labour force survey, the number of employees working in the informal labour market fell in 2020 by about 4.5 % and increased by about the same amount last year. Thus, changes in the informal employment caused almost the same share of the drop in total employment in 2020 and recovery last year as did the formal labour market. The number of persons working in the informal labour market has returned to around 14.5–15 million, about a fifth of all persons employed.
With employment recoveries, the number of unemployed persons declined from 4.5 million in the final months of 2020 to 3.2–3.3 million in recent months. In the same period, the unemployed share of the labour force declined from over 6 % to less than 4.5 %. This means the unemployment rate currently stands at historic lows. In addition, the numbers of laid-off persons and persons working part-time have returned to 2019 levels.
The number of persons more loosely connected to labour markets than the unemployed also changed considerably in the economic downturn in spring 2020 and recovery in 2021. In Rosstat’s labour force survey they mainly include persons who have not been looking for a job but would be ready to start working. In the International Labour Organization’s (ILO) definition this group constitutes potential labour force. In Russia they comprised nearly 1.5 million persons in the final months of 2020 but no longer more than 1.1 million last autumn.
Russian unemployment hit record lows at the end of 2021
Sources: Rosstat and BOFIT.