INFORMAL EMPLOYMENT OF THE POPULATION OF RUSSIA: ASSESSMENT OF THE SCALE AND THE IMPACT ON PUBLIC FINANCES OF THE COUNTRY

• Published in: Finansy: teoriâ i praktika (Online) Vol. 21; no. 6; pp. 60 - 69
• Main Authors: Salin, V. N., Narbut, V. V.
• Format: Journal Article
• Language: English
• Published: Government of the Russian Federation, Financial University 01-12-2017
• Subjects: employment legalization; employment rate; informal employment; informal sector; public finances; receipt of taxes and fees in the budget
• ISSN: 2587-5671; 2587-7089
• DOI: 10.26794/2587-5671-2017-21-6-60-69

Topic. The research object of the article is informal employment of the population of the Russian Federation. The authors assessed the magnitude of this phenomenon in the period from 2005 to 2015. We analyse the age structure, educational level, status of the population involved in informal activities, regional characteristics of the spread of this phenomenon, and made grouping of Russian regions by share of employed in the informal sector. At the end we make the final selection of the demographic, economic, social and financial factors influencing the proportion of the population engaged in informal activities.Purpose. The purpose of the study is to establish dependence between the selected indicators and the level of informal employment, as well as assessment of the impact of informal employment on the socio-economic development of the country and the state of public finances.Methodology. The study is based on statistical methods: data grouping, analysis of indexes’ dynamics, one-factor analysis of variance. Evaluation of the relationship between variables was carried out based on the Spearman’s rank correlation coefficient. The association was considered significant at p<0.05. Calculations were made using the Attestat add-in for Microsoft Excel 2010 and statistical software package STATISTICA 10.Results. The authors identified a direct correlation between the share of informal employment and a level of unemployment, and reverse relation between the average money incomes of population per capita and GRP, the amount of investments per capita, level of development of small business, and income taxes per capita. Informal employment negatively affects the collection of taxes, fees and other payments. Regional budgets annually lose substantial amounts of revenues. In 2015, in the regions with a low share of informal employment (10%) revenues count for 214,298 rubles taxes, fees and charges per capita, and with a high share of informal employment (over 50%) it is almost 25 times less — only 8703 rubles.Conclusions. The results of the study allow us to conclude that today reducing informal employment of Russia’s population and the legalization of employment is the most relevant issues in the field of social and labour relations. Situation when a significant part of workers do not pay taxes and mandatory payments, but use social benefits, requires the solution. Given the results obtained, to solve the question of informal employment of Russia’s population it is necessary to take measures to reduce unemployment, improve living standards and development of small business in regions where the incidence of that phenomenon is high.