Shadow Economy in Russian Regions: Urban and Rural Areas Contributions
The article explores the relationship between the sizes of the shadow economy and agriculture, and verifies the statement that the growing agricultural share in GDP leads to an increase in the shadow economy. We present the results of testing the statistical interrelation between the size of the shadow economy in Russian regions and the indicators reflecting the size of agriculture (distribution of the rural and urban population over the total population, the share of agricultural production in the GRP). The research method involves analyzing the approximation curves constructed from scatter plots using the urban population ratio and the logarithm of the shadow sector indicators. We incorporate the Rosstat data and authors’ calculations measuring the size of the shadow economy in Russian regions for 2002-2013. The article confirms a hypothesis that there is a direct relationship between the size of the shadow sector and the share of agriculture in the economy. In regions, the size of the shadow economy is notably interrelated with the proportion of the rural population and moderately interrelated with the share of agriculture, hunting, and forestry in GRP. We observe gradually increasing informal employment in non-agricultural activities. The conclusion is as follows: further rural-urban migration and urban population growth will increase the size of the shadow economy in the least urbanized regions and decrease it in semi-urbanized regions.