# **IV. Main Results**

We find that informal workers do not have lower satisfaction with their jobs, nor lower selfreported health. After controlling for personal characteristics and work conditions, formal and informal workers have no systematic difference in job satisfaction. In terms of self-assessed health, formals and informals never show a systematic difference. On the other hand, we find a significant and growing wage gap between formal and informal workers, and a statistically significant association between informality, life dis-satisfaction, and household poverty among certain types of informal employment.

## **Informal employment and working conditions**

We first explore whether informal workers experience different work conditions. We answer this question making use of detailed information from three surveys. Our analysis includes the number of hours worked (from RLMS), whether the worker has a set or contracted number of hours (from the ESS), and whether the worker would like to work more hours (from the LiTS). Using number of hours worked, we define binary variables that are equal to one if the worker reports to have worked less than 20 hours per week or more than 50 hours per week. Additional measures of work conditions also include binary variables for whether a worker received paid vacations last year, whether the job was considered harmful or dangerous, and whether the worker is concerned about losing their job. The RLMS also provides subjective assessments on the worker’s satisfaction with the job’s work contract, growth opportunities and pay. Responses to these questions are recorded in a five-point scale, from absolutely dissatisfied to absolutely satisfied, which we use to define a binary outcome variable that equals one if the worker reports being not very satisfied or absolutely unsatisfied with her work contract or the job’s growth opportunities. A summary of unconditional means of these work conditions between formal and informal workers is illustrated in Figure 9.

On average, informal workers are more likely to work non-standard hours and have less stability in terms of work hours. Specifically, informal workers are more likely than formal workers to work either few, i.e., less than 20 hours, (4.3 percent and 1.3 percent, respectively) or long hours, i.e., more than 50 hours (28.8 and 10.8 percent, respectively). Informals are also more likely to be willing to work more hours (14 percent of informals, whereas only 8 percent of formals). Informal workers are also less likely to have a basic ‘set’ or contracted number of hours (64 vis-a-vis 88 percent, respectively). Formal and informals are equally likely to have a second job (about 4 percent).

Moreover, informal workers are much less likely to have paid vacation, but not more likely to have harmful or dangerous jobs or be more concerned about losing their job. Only 14 percent of informal workers have paid vacation whereas 74 percent of formal workers do. On the other hand, 3 percent of informal workers report having a hazardous job, while 13 percent of formal workers do. Concern <u>about job loss is very similar between the two groups (64 and 66 percent, respectively).</u> Informal Employment and Worker’s Wellbeing in Russia 18/67