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Structural Change, Expanding Informality and Labour Productivity Growth in Russia

Ilya Voskoboynikov ()

No WP BRP 168/EC/2017, HSE Working papers from National Research University Higher School of Economics

Abstract: Recent decades have been years of intensive growth, structural change and expanding informality for many developing and emerging economies. However, in exploring the relationship between structural change and productivity growth, most empirical studies ignored informality. This paper explores how structural change in the Russian economy 1995–2012 affects aggregate labour productivity growth, taking into account the informal sector. Using a newly developed dataset for 34 industries and applying three alternative approaches aggregate labour productivity growth is decomposed into intra-industry and inter-industry contributions. All three approaches show that the overall contribution of structural change is growth enhancing, significant, and dumped in time. In turn, labour reallocation between the formal and informal sectors is growth reducing because of the extension of informal activities with low productivity levels. At the same time, sectoral labour reallocation effects are found to be highly sensitive to the methods.

Keywords: labour productivity; structural change; informal economy; Russia (search for similar items in EconPapers)
JEL-codes: O11 O17 C82 N14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-iue, nep-tid and nep-tra
Date: 2017
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Published in WP BRP Series: Economics / EC, July 2017, pages 1-33

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