The Impact of Population Credit Behaviour on Employment in the Informal Sector in Russian Regions
DOI:
https://doi.org/10.17059/ekon.reg.2025-1-10Keywords:
credit debt, mortgage lending, housing lending, employment, informal sector, systemic GMM method, Russian regionsAbstract
Employment in the informal sector is a significant issue for national economies, with approximately one-fifth of Russia’s economically active population working in this sector. At the same time, household debt levels are rising in many regions, which could drive additional work, including in the informal sector. This study explores whether credit behaviour influences changes in informal sector employment across Russian regions. Using panel data from 2005 to 2021 for 83 Russian regions, the analysis draws on data from Rosstat and EMISS. The initial panel consisted of 1,411 observations. The estimation was conducted using the system GMM method. The dependent variable represents the share of people employed in the informal sector out of the total employed population aged 15-72 in each region. Key explanatory variables include total population debt and debt related to housing and mortgage loans. Control variables account for the region’s development level, economic structure, age-specific unemployment rates, family dynamics, and education institutions. The econometric analysis reveals a statistically significant negative impact of mortgage and housing debt on informal sector employment, while no effect was found for total debt. Additionally, higher levels of education and industrial production correlate with a reduction in informal sector employment. Conversely, an increase in GRP, a larger agricultural sector, higher unemployment among the elderly, and rising divorce rates contribute to higher informal sector employment. These findings can inform the development and implementation of state strategies and national projects.
References
Akande, R., Kareem, H. K. K. A., & Sulaimon, T. (2021). Gender, Regulation Efficiency and Informal Employment in Sub-Saharan Africa. Pakistan Journal of Humanities and Social Sciences, 9 (1), 29–37. https://doi.org/10.52131/pjhss.2021.0901.0110
Al-Maaitah, N., Daoud, Y. S., & Shanti, R. A. (2019). To what extent micro lending institution’s policy help to improve income and employment prospects of women start-ups: case study from Jordan. Journal of Small Business and Entrepreneurship Development, 7 (1), 41–59. http://dx.doi.org/10.15640/jsbed.v7n1a4
Anisimov, R. I. (2024). Dynamics of employment in Russia (2018 — mid-2023). Sotsiologicheskie issledovaniya [Sociological Research], (1), 73-84. https://doi.org/10.31857/S0132162524010078 (In Russ.)
Atesagaoglu, O., Bayram, D., & Elgin, C. (2017). Informality and structural transformation. Central Bank Review, 17 (4), 117–126. https://doi.org/10.1016/j.cbrev.2017.11.002
Bologna, J. (2016). The effect of informal employment and corruption on income levels in Brazil. Journal of Comparative Economics, 44 (3), 657–695. https://doi.org/10.1016/j.jce.2015.12.001
Chupenko, L. V. (2016). Factors influencing lending behavior of the population: the regional aspect. Sever i rynok: formirovanie ekonomicheskogo poryadka [The North and the Market: Forming the Economic Order], (1(48)), 88–95. (In Russ.)
Decardi-Nelson, I., Asamoah, O. R., Solomon-Ayeh, B, & Nduro, K. A. (2014). The informal sector and mortgage financing in Ghana. Ghana Journal of Development Studies, 9 (2), 136–152. http://dx.doi.org/10.4314/gjds.v9i2.8
Diomin, A. N., Kireeva, O. V., & Pedanova, E. Yu. (2018). Debtors attitude towards credits. Sotsiologicheskie issledovaniya [Sociological Research], (11), 85–94, https://doi.org/10.31857/S013216250002788-9 (In Russ.)
Djidonou, G. R., & Foster-McGregor, N. (2022). Stagnant manufacturing growth in India: the role of the informal economy. Structural Change and Economic Dynamics, 63 (3), 528–543. https://doi.org/10.1016/j.strueco.2022.07.007
Doroshenko, S. V. (2023). State policy and population incomes structure: An experiment with self-employment. Ars Administrandi, 15 (2), 338–352. https://doi.org/10.17072/2218-9173-2023-2-338-352 (In Russ.)
Doroshenko, S. V. (2024). Informal employment: Does the tax regime affect professional income? Intellekt. Innovatcii. Investitcii [Intellect. Innovations. Investments], (3), 11–22. https://doi.org/10.25198/2077-7175-2024-3-11 (In Russ.)
Elgin, C., & Öztunali, O. (2012). Shadow economies around the world: model based estimates. Bogazici University Department of Economics Working Papers, 5 (2012), 1–48.
Fapohunda, T. M. (2013). Reducing unemployment through the informal sector in Nigeria. International Journal of Management Sciences, 1 (7), 232–244.
Haigner, S., Jenewein, S., Schneider, F., & Wakolbinger, F. (2013). Driving forces of informal labour supply and demand in Germany. International Labour Review, 152 (3-4), 507–524. https://doi.org/10.1111/j.1564-913X.2013.00191.x
Islam, M. T., & Alam, M. J. (2019). The relationship between informal economy and GDP growth: a study on South-Asian developing countries. Canadian Journal of Business and Information Studies, 1 (5), 1–9. https://doi.org/10.34104/cjbis.019.0109
Karpushkina, A. V., Danilova, I. V., Voronina, S. V., & Savelieva, I. P. (2021). Assessing the impact of employment in the informal sector of the economy on labor market development. Sustainability, 13 (15), 8435. https://doi.org/10.3390/su13158435
Kolm, A. S., & Larsen, B. (2016). Informal unemployment and education. IZA Journal of Labor Economics, 5 (8). https://doi.org/10.1186/s40172-016-0048-6
Lehmann, H., & Zaiceva, A. (2013). Informal employment in Russia: Incidence, determinants and labor market segmentation. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2330214
Liepmann, H., & Pignatti, C. (2021). Welfare Effects of Unemployment Benefits When Informality Is High. IZA Discussion Papers, (14601).
Mareeva, S. V. (2017). Russians’ adaptation to effects of the economic crisis. Sotsiologicheskie issledovaniya [Sociological Research], (11), 65–75. https://doi.org/10.7868/S0132162517110083 (In Russ.)
Obodoechi, O. B. (2020). Cooperative housing scheme for low-income earners in the informal sectors and Federal Mortgage Bank of Nigeria. IMT International journal of the arts and sciences, 3 (5), 88–106.
Purnomo, H. (2022). Sustainable mortgage financing model for informal workers using a digital ecosystem and community-based approach. Jurnal Ekonomi, 11 (03), 513–526.
Renzin, O. M., & Trope, T. I. (2016). Credit behavior of the population: regional comparative studies. Vlast’ i upravlenie na Vostoke Rossii [Power and Administration in the East of Russia], (3(76)), 52–60. (In Russ.)
Schneider, F., & Enste, D. H. (2000). Shadow economies: size, causes, and consequences. Journal of economic literature, 38 (1), 77–114.
Simutina, N. L., Leventov, N. N. & Puzikova O. P. (2018). The Impact of Economic Factors on the Employment Rate in the Informal Sector: Regional Aspect. Prostranstvennaya Ekonomika [Spatial Economics], (1), 83–100. https://doi.org/10.14530/se.2018.1.083-100 (In Russ.)
Uzyakova, E. S. (2022). Informal employment and its impact on population’s income and labor productivity. Problemy prognozirovaniya [Problems of Forecasting], (6(195)), 198–207. https://doi.org/10.47711/0868-6351-195-198-207 (In Russ.)
Vidović, N., & Ritan, V. (2022). New approach to estimating macroeconomic determinants of informal employment. Economics, 10 (2), 95–108. https://doi.org/10.2478/eoik-2022-0012
Volchik, V., Maslyukova, E., & Strielkowski, W. (2020). Spatial effects of informal employment and precarization in urban centres and regions. Theoretical and Empirical Researches in Urban Management, 15 (4), 21–37.
Williams, C. C., & Horodnic, A. V. (2019). Why is informal employment more common in some countries? An exploratory analysis of 112 countries. Employee Relations: The International Journal, 41 (6), 1434–1450. https://doi.org/10.1108/ER-10-2018-0285
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Дорошенко Светлана Викторовна , Санаева Ольга Владимировна
This work is licensed under a Creative Commons Attribution 4.0 International License.
