Shadow employment of Bashkortostan Republic: internal economic shock from retirement system reform

Doklady Bashkirskogo Universiteta. 2020. Volume 5. No. 1. pp. 42-49.

DOI: https://doi.org/10.33184/dokbsu-2020.1.9

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This article describes the systemic relationship between the parameters of the pension system and the development of the shadow economy. The author comes to the conclusion that until recently scientific research was devoted more to the shadow economy influence on the retirement system functioning. Due to the significant shock effects of the “Pension reform” of 2018, the focus of economic analysis has shifted in the opposite direction. Currently the influence of pension system parameters on the development of informal relations between employees and employers is being investigated. Based on the assessment of the number of informal workers identified in Bashkortostan Republic in 2015-2019, the author proves that the change in pension legislation, negatively adopted by both employees and employers, leads to an accelerating growth of shadow relationships and loss of state control over the social and labor sphere of the region’s economy.