The employment structure of rural inhabitants in the informal economy

Abstract

The study presented in this article - which is a study of rural employment in the informal economy - relies on data from the following surveys of households and individuals - "Comprehensive monitoring of the population's living conditions" and "Selective monitoring of income and participation in social programs", both carried out by Rosstat in 2011-2015 and commissioned by the Russian government. Rural residents ages 16 and up were interviewed in every region of the 9 Federal districts, including the Crimean Federal district. It is revealed that the transition to a market economy during the 1990's was accompanied by increasing unemployment and poverty, transformations in the labor market, and the emergence of various forms of self-employment. A decrease in the level of rural inhabitants employed in farming, together with an increase in other fields of the agro-industrial complex (AIC), lead to sectoral mobility (relocation), the transformation of rural social structure, and the development of an informal sector, one third of those employed in which are rural residents. Employment in the informal economy is quite a risky endeavor, which in many ways makes the agrarian labor market unstable as a market economy institution. However, despite the informal sector being characterized by a primitive level of technology, low capital-intensity, as well as low levels of human capital, nevertheless, it compensates the expenses of Russian village social development by way of absorbing labor resources, which, had they ended up outside of this sector, might have stayed out of business.