战略与国际研究中心-PONARS-Policy-Memo-186_5页_80kb

The Development of Self-Employment in Russia: Summary

Core Content

This document explores the development, characteristics, and significance of self-employment in Russia during the 1990s and early 2000s, particularly in the context of market transition. It draws on two national surveys to analyze the extent, composition, and attitudes of self-employed individuals, and provides policy recommendations to encourage self-employment, especially among the unemployed, the young, and women.

Main Points

1. Growth and Prevalence of Self-Employment

• Self-employment in Russia has grown relatively slowly compared to other post-Soviet and Western countries.
• From 1994 to 2000, self-employment represented 4.5% to 6.7% of the non-agricultural workforce.
• The majority of self-employed individuals are individually self-employed, meaning they do not hire employees.
• The number of privately owned small businesses in Russia reached 890,600 by January 1, 2000, though this does not include all self-employed individuals.

2. Economic and Social Characteristics

• The self-employed, particularly individual entrepreneurs and small employers, report higher income levels, greater material satisfaction, and stronger support for market reforms compared to other occupational groups.
• In 1998 and 2000, both groups of self-employed individuals had higher average earnings than other classes, except managers.
• They also express greater satisfaction with their material situation and stronger endorsement of market reforms, indicating their alignment with market-oriented policies.

3. Demographic Composition

• Younger Russians (especially those in their 20s) are more likely to become self-employed than older or middle-aged individuals.
• Males are more likely to engage in self-employment than females, with the gender gap remaining stable throughout the 1990s.
• Education and occupation (particularly in services, trade, and construction) are positively correlated with the likelihood of self-employment.
• Unemployed individuals and those not in the labor force are more likely to become self-employed due to lower opportunity costs.

4. Challenges to Self-Employment

• High taxes, changing tax rates, and inconsistent tax enforcement create significant burdens for small businesses.
• Regulatory complexity and corruption act as barriers to entry and increase transaction costs.
• Weak legal institutions make it easier for organized crime to extort protection fees from new businesses.

5. Policy Recommendations

• Tax and regulatory reform should be pursued to reduce the administrative and financial burdens on small businesses.
• Financial support and technical assistance programs, such as the EBRD's Russian Small Business Fund (RSBF), have shown success in promoting self-employment and job creation.
• Targeted assistance should be directed toward the unemployed, the young, and women, who are more likely to benefit from such programs.
• Child care and health care benefits for women could help address the persistent gender gap in self-employment.

Key Information

• Self-employment rates (1991–2000):

  • Individually self-employed: 0.7% (1991) to 4.3% (2000)
  • Employers: 0.6% (1991) to 1.1% (2000)
  • Total: 1.3% (1991) to 5.4% (2000)

• Main business activities:

  • Trading, selling, and street vending
  • Transportation (taxis, trucks)
  • Construction
  • Various services (medical, accounting, security, cleaning, personal care, sewing, etc.)

• Economic and political significance:

  • Self-employment contributes to economic growth, job creation, and innovation.
  • It provides opportunities for material advancement to marginalized groups.
  • The self-employed are seen as a counterweight to large corporate influence and a supporter of market reforms.

• Policy implications:

  • Strengthening commercial banking and financing programs can help promote self-employment.
  • Improving legal and regulatory frameworks is essential for reducing corruption and transaction costs.
  • Encouraging self-employment among women can help reduce the feminization of poverty in Russia.

Conclusion

Self-employment in Russia has played a growing role in the country’s market transition, despite slower growth compared to other countries. The self-employed are economically and politically more favorable than many other groups, and their continued expansion could enhance Russia’s economic and social development. Targeted policies and support systems are needed to further promote self-employment, especially among vulnerable and underrepresented groups.