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  • Classification of the informal employment and the methods of its assessment

Classification of the informal employment and the methods of its assessment

TERRA ECONOMICUS, , Vol. 13 (no. 1),
p. 14-29

The concept of informal activities is considered in the article, showing that the initially informal economic activity was investigated in relation to developing countries. However, with the gradual expansion of the study of this phenomenon, it became clear that informal employment relationships are present in varying degrees in all types of economy. The causes of popularization of the concept of «informal sector» and the differences between the main approaches to its analysis are determined. The evolution of the understanding of this phenomenon’s essence from impersonation of poverty and backwardness of the underdeveloped countries to alternative economic activities is demonstrated. A number of approaches to the classification of this institute is considered (on the basis of such criteria as: the type of production unit; employment status; the subject of the production of goods and services; the type of violating institutional rules; the degree of legality of business operations; relationship with the formal economy; stage of reproduction). The analysis of the presented approaches concludes that the informal economy covers in varying degrees all spheres of social reproduction. The attempt to determine the boundaries between different types of informal employment is made. A number of special methods exists to assess the scale of the phenomenon, which can be divided into direct (microeconomic) methods and indirect (macroeconomic) methods. The usage of direct methods is based on obtaining the necessary information by means of surveys, inspections, audits. The basis of indirect methods is the analysis of official statistical information concerning employment and financial activities indicators, relevant data of tax and financial authorities. The shadow economy is estimated in Russian Federation both at federal and regional levels. The main method used at the Federal level is balance method. The special sample surveys are used at the regional level, as well as indirect methods of calculating. It can be argued on the base of these estimates that the informal sector plays a significant role in providing employment and income, in the production of goods and services, creating jobs.

Keywords: informal economy; shadow economy; informal employment; informal economic activities; classification; evaluation methods; scale; Russia

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606