INFORMAL EMPLOYMENT IN UKRAINE: SOCIO-ECONOMIC DEVELOPMENT

Abstract

The article presents the socio-economic analysis of statistical indicators of the prevalence of informal employment. Informal employment is widely defined as paid work that is not declared to the state for tax, social security and labour law purposes
when it should be declared but that is legal in all other respects. Informal employment takes various forms. On the one hand, there is wholly informal employment where the worker is not formally employed by the employer and the remunerated activity is not declared to the state for tax, social security and labour law purposes. This may take the form of either waged employment or self-employment. The main areas, age characteristics and territorial placement of informally employed in Ukraine are investigated. The consequences of functioning of informal employment are determined. It is proved that informal employment can act as a result of social exclusion and voluntary exit beyond the formal institutionalized economic activity. The risks are explored in the prevalence of informal employment for the state and society (social insecurity, nonpayment of tadeductions). Positive points are explored in the functioning of informal employment (flexibility, self-employment, micro entrepreneurship). Informal, secondary employment allows to some extent to provide mobility and a higher employment rate in this case reducing the risk of unemployment and increasing the chances of employment. Negative aspects include low quality of work, lack of basic rights in the field of labour protection under the absence of an employment contract and health insurance. The structure of informal employment is one of the most important features where the largest proportion of informal workers is observed in agriculture, construction and service industry. Therefore, there are some methodological difficulties, which do not allow to estimate a real percentage of temporarily employed in the sphere of informal economy.