From the Transformation of Rural Areas to Informal Employment Among Southern Russia’s Population

Abstract

The article deals with informal economic activity in two regions of the North Caucasus: The Stavropol region and the Ingush Republic. The prevalence of informal economic activity brings a number of challenges for state social policy. In order to deal with them, it is important to understand the reasons behind the rise of such practices. The paper finds that the reasons for its emergence can vary according to the specifics of a given region. Thus, in Stavropol region, agriculture is relatively more developed than in many other regions of Russia, due to the post-soviet modernization of production, the emergence of agricultural holdings and the change of specialization of agriculture to mechanized labour-intensive crop production. Despite this, these changes have led to a lack of jobs in rural relatively large settlements. The specific features of different ethnic groups and their economic activities in the Stavropol region was also important. This has resulted in unemployment in rural areas, intensified urbanization and labour migration of the local population from Stavropol to other regions of Russia and to large cities. Mainly
of them are focused on informal employment. This has also contributed to the development of private farming. The Ingush Republic contrasts to Stavropol region in many ways. The rural share of the overall population is the highest in the North Caucasus, although only a very small part of this population is actually engaged in agriculture. The regional budget mainly consists of federal subsidies. Nevertheless, economic activity of local rural population is very high. It is concentrated mainly in self-employed work, but not in agriculture. In an overview of preconditions for the rise of informal economy, data are presented on the labour market and the incomes of the population in the two regions, on official and actual unemployment, on regional budgets and the destinations of migration flows. The results are based on the use of regional and municipal statistics and on the author’s fieldwork in different municipal districts and rural settlements of the Stavropol region and Ingush republic.