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Features of formation and functioning of the informal labor market in Ukraine

Journal: Management of the economy: theory and practice (Vol.5, No. 5)

Publication Date:

Authors : ;

Page : 293-304

Keywords : incomes of the population; economic activity; taxes; informal employment; secondary employment; unemployment; working conditions; work organization; social protection; standard of living;

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The basic conditions for forming the informal labor market sector in Ukraine in the post-Soviet period are considered. The main reasons for unregistered activity and motives that drive people to informal employment are highlighted. Among these reasons are accidental (non-special), forced and deliberate ones. The basic types and forms of activity in the informal labor market sector in Ukraine are defined. Main characteristics of the modern informal labor market sector are identified. They include: the significant stratification and polarization, combining of the formal and informal activities of workers, the gradual disappearance of the boundaries between formal and informal employment. The differences of informal employment representatives of various social and professional categories are adjusted. Influence of the traits of national mentality on permanent expansion of the informal labor market sectors are justified. It is found that the functioning of the informal labor market has a large number of social and economic consequences, both positive and negative. The informal sector of the labor market has a positive effect on some social indicators, provides employment opportunities for special categories of the population (socially vulnerable groups), provides people with additional income, helps to mitigate the negative effects of unemployment. The main negative consequence of the informal sectors on the labor market is a shortfall in tax revenues to the state budget.Besides, the negative aspect is that unregistered activity is not well regulated and does not conform to the standards of working conditions, does not provide the social protection for employees. The article justifies the inevitability of existence of the informal labor market sector and the complexity of its assessment and management. Using a differentiated approach to regulating the informal sector of the labor market and its social and economic impact is proposed.

Last modified: 2017-08-31 22:23:25