Structural Change, Expanding Informality and Labor Productivity Growth in Russia

Abstract

Strong growth, intensive structural change, and expanding informality have characterized many developing and emerging economies in recent decades. Yet most empirical investigations into the relationship between structural change and productivity growth overlook informality. This paper includes the informal sector in an analysis of the effects of structural changes in the Russian economy on aggregate labor productivity growth. Using a newly developed dataset for 34 industries covering the period 1995-2012 and applying three alternative approaches, aggregate labor 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 decreasing over time. Labor reallocation from the formal sector to the informal sector tends to reduce growth through the extension of informal activities with low productivity levels. Sectoral labor reallocation effects are found to be highly sensitive to the methods applied.JEL Codes: O11, O17, C82

Diagnosing the UK productivity slowdown: which sectors matter and why?

“…(2012, 2015, 2021), Diao et al . (2019), Moussir and Chatri (2020), and Voskoboynikov (2020). 5 Tang and Wang (2004) adopt the GEAD method and find that the aggregate labour productivity growth gap between Canada and the USA during 1987–98 was driven by the within‐industry contribution in manufacturing and service sectors.…”

“…Other industries, including wholesale and retail trade, financial services, administrative services and public administration, have also grown significantly more slowly in the period 2008-19 compared to 1998-2007. These charts nevertheless do not answer the question about the role played by reallocation of activity from high to low productivity sectors and the pure within-sector productivity contribution. To answer this question, previous studies have explored the trend differences (before and after 2008) using different decomposition approaches (see, for instance, Fabricant 1942;Maddison 1952;Tang and Wang 2004;McMillan and Rodrik 2011;De Vries et al 2012;Diao et al 2019;Moussir and Chatri 2020;Voskoboynikov 2020;De Vries et al 2021).…”

“…6 6 While Voskoboynikov (2020) also includes a whole economy sector and finds that structural change is growth‐enhancing but decreasingly so over time, the author focuses on only the Russia economy and does not use the Tornqvist decomposition.…”

Diagnosing the UK Productivity Slowdown: Which Sectors Matter and Why?

“…Our work is related to the recent papers by Tang and Wang (2004), McMillan and Rodrik (2011), De Vries et al (2012, 2021, Diao et al (2019), Moussir andChatri (2020), andVoskoboynikov (2020). 5 Tang and Wang (2004) adopt the GEAD method and find that the aggregate labour productivity growth gap between Canada and the USA during 1987-98 was driven by the within-industry contribution in manufacturing and service sectors.…”

Imagen Laboral Del Trabajador Ruso a Finales Del Siglo Ix - Principios Del Siglo X (Estudio De Caso De La Región Minera Y Metalúrgica De Los Urales)

“…One of the most important tasks in studying this complex issue is to analyze the peculiarities and real state of labor ethics of the Russian worker as the vital part of and the basis for the successful implementation of any reformatory plans. Nevertheless, being a high-priority item both in sociological (Bazhov, 1986;Koznova, 2021) and historical research (Voskoboynikov, 2020), labor ethics of Russian workers is still insufficiently studied in many regions of the Russian Federation, including the Urals. In this regard it seems justifiable and logical to analyze labor ethics of one of the leading groups of the Russian working class, particularly the Ural metal workers during the period of Russian reforms in the late nineteenth -early twentieth centuries.…”