Integrating New Standards of Informal Economy Statistics into Rosstat’s Practice: Challenges and Prospects

Abstract

The paper examines methodological challenges of measuring informality following major revisions of international statistical standards. It analyses the Resolution concerning statistics on the informal economy adopted by the 21st International Conference of Labor Statisti-cians (2023) and offers practical recommendations for implementing this framework in the official statistics of the Russian Federation (Rosstat). Methodologically, the study includes a review of how international guidelines have developed, a comparison of current Rosstat’s practices with the new requirements, and empirical estimations based on microdata from the 2025 Labor Force Survey.

The analysis highlights four key changes in the measurement standards: (1) a clear procedure for classification of economic units into the formal sector, the informal sector, and the household own-use and community sector; (2) the integration of employment status categories from the International Classification of Status in Employment (ICSE-18) into the measurement of informality; (3) revised operational criteria for sector identification, notably removing enterprise size as a main criterion for defining the formal status of an economic unit and classifying an economic unit as formal if it employs at least one worker in a formal job; (4) the use of employer social insurance contributions as the main criterion for identifying formal employment, with access to paid annual and sick leave serving as supplementary criteria.

The authors demonstrate that Rosstat's current definition of the informal sector is too broad relative to modern international standards, leading to an overestimation of employment in this sector. The main issue is automatic classification of all engaged in entrepreneurial activities into the informal sector. In our opinion, registered individual entrepreneurs and their employees should be assigned to the formal sector. Preliminary estimates suggest that adopting the new standards could reduce the measured share of employment in the informal sector by approximately one-third. The paper also emphasizes the importance of shifting focus from enterprise-based measures (employment in the informal sector) to worker-centered measures (informal employment), which better reflect job quality and economic risks held by workers.