In 2010, city dwellers dominated among the unemployed, while in January 2011 city dwellers accounted for almost two-thirds (63.7%) of the unemployed. As the unit weight of the rural population in the total number of the Russian population is three times lower than that of city dwellers (27% against 73% as of January 1, 2010), the possibility of becoming unemployed in 2010 was 70 % higher in rural areas than in cities; such a situation was related to a greater extent to a more complicated economic situation in rural areas. In January 2011, the level of general unemployment amounted to 6.5% among city dwellers and 10.8% among residents of rural areas with the total level of unemployment amounting to 7.6%.
The growth in unemployment during the crisis years affected both the youth and groups of elder people. However, in 2009 the growth rates of the unemployment among the groups of elder people were 15% higher than those among the youth in the age of 15–24 years old. A drop in the unemployment which began in 2010 was characterized by higher rate of decrease in the unemployment among the youth (10%) as compared to those among the groups of elder people. Such a situation resulted in a decrease in the unit weight of the youth among the unemployed. As compared to 2007, in 2009 the share of the youth in the age of 15–24 among the unemployed fell by 2.8 % to amount to 26.7% of the total number of the unemployed. In 2010, the above trend continued and in January 2011 the unit weight of the youth among the unemployed decreased by another 1.9 % to amount to 24.8% of the total number of the unemployed.
In 2010, the average period of a job search somewhat reduced as compared to that in 2009:
in November 2010 the average period of a job search amounted to 7.9 months, while in November, 2010, to 7.7 months.
In 2010, the structure of the unemployment as regards the period of a job search discernibly stabilized: if in 2009 a substantial growth of 7.2 percent as compared to 2008 in the midterm (from 3 to 12 months) unemployment with an insignificant reduction (by 1%) of the long-term (12 months and more) unemployment and discernible reduction (by 6.2 %) of the short-term unemployment was registered, in 2010 changes in the structure of the unemployment as regards the period of a job search were insignificant as compared to those in 2009.
(see. Fig. 7).
In looking for a job, the unemployed use some of the following main methods: they apply to the state employment service, turn to friends and relatives, look for job openings and place their own CVs in the mass media and contact employers directly. The most widespread practice is turning to friends and relatives and applying to the state employment service. In 2010, it was found that more and more unemployed people look for a job by referring to friends and relatives: in January 2011 the share of the unemployed who used the above method amounted to 59% of the total number of the unemployed, while in January 2010 it was 52.8%. The unit weight of the unemployed who look for a job by turning directly to employers increased by 2%. A similar increase is typical of a job search through the mass media and the Internet. In January 2011, the share of the unemployed who turn to the state employment service for a vacant job was lower than that in January 2010 (35.2% in 2011 as against 40.1% in 2010) (See Fig. 8).
Social Sphere 100% 32,3 32,33,38,80% 60% 31,39,1 38,30,40% 20% 34,30,2 29,28,0% 2007 2008 2009 Up to 3 months From 3 to 12 months 12 months and more The source: Rosstat.
Fig. 7. Distribution of the number of the unemployed by the length of the period of a job search (on the basis of the data of sample surveys regarding the problem of employment in November, %) 80,59,52,60,40,35,40,0 26,25,24,22,20,0,January 2010 January those applying to friends and relatives those applying to the state employment service those applying directly employers those applying to the mass media and the Internet The Source: Rosstat Fig. 8. Methods of a job search used by the unemployed, % of the total number of the unemployed.
Resolution No. 926 of November 14, 2009 of the Government of the Russian Federation fixed the amount of the unemployment benefit in 2010 at the same level as in 2009:
• The minimum amount of the benefit is RUR 850 a month;
• The maximum amount is RUR 4,900 a month.
In 2011, the amount of the minimum unemployment benefit and maximum one remained unchanged1.
See Resolution No. 812 of October 12, 2010 of the Government of the Russian Federation.
RUSSIAN ECONOMY IN trends and outlooks 5.2.2. New Lines of Inclusion of the Unemployed in Employment in the Russian Federation in 2010.
From January 2010, an experiment was initiated by the President of the Russian Federation to render assistance to low-income households on the basis social contracts1. In case of success of the experiment, rendering of assistance to the low-income households on the basis of social contracts is expected to be applied nationwide until 20122. In practical terms, the above experiment is aimed at inclusion of the unemployed able-bodied people in employment (including self-employment) on the basis of provision of social assistance to such people (including that in the form of a monthly benefit or non-recurrent payment) with raising of their responsibility for getting out of a difficult life situation. Such measures have been practiced for long in developed countries.
Approaches to Inclusion of the Unemployed Able-Bodied People in Employment in OECD States.
In OECD countries, system measures aimed at inclusion of the unemployed in employment (the activation policy) were introduced in the practice of dealing with the unemployed in the 1990s and the 2000s. The main guidelines for inclusion of the unemployed in the labor market in OECD countries include: conclusion of agreements and/or contracts with the unemployed on plans of individual actions as regards inclusion of such people into employment and other measures; development and fulfillment of individual plans of actions as regards exit from the existing situation and, primarily, those related to inclusion in employment and, consequently, mandatory participation in employment programs; follow-up by an expert (who is assigned to the beneficiary) of fulfillment of the individual plan of actions; regular monitoring of the progress made by the beneficiary in fulfillment of the individual plan of actions; expansion of the set of programs on inclusion in employment (training, education, subsidized employment, employment assistance, development of foreign language skills, raising of the literacy level, rendering of medical, administrative and social services and other).
A system policy of inclusion of the unemployed in employment is usually accompanied by introduction of both tougher criteria for receipt of benefits and sanctions against the unemployed in case of refusal by the latter to cooperate in order to find a job. Measures may include financial incentives which motivate people to take relatively low-paid jobs (preservation for a certain period of time of a portion of the earlier received benefits in case of employment of the unemployed in order to reduce a possible demotivating effect of a low pay) or subsidies which motivate employers to hire people with a lower level of efficiency.
The source: OECD (2006), Boosting Jobs and Incomes – Policy Lessons from Reassessing the OECD Jobs Strategy, OECD; EC (2006), Concerning a consultation on action at EU level to promote the active inclusion of the people furthest from the labor market, Communication from the European Commission, Brussels.
The data of a number of surveys in OECD countries has shown that provision of generous unemployment benefits and social assistance within a long period of time, on the one hand, undermines labor motivation and results in dependence of beneficiaries on benefits and, on the other hand, involves high public spendings on the social security of low-income households.
Instructions No. Pr-19 of January 27, 2010 of the President of the Russian Federation (2010); the Government Plan of Realization of the Main Anti-Crisis Guidelines and the Policy of Modernization of the Russian Economy in 2010 approved by V. Putin, Chairman of the Government of the Russian Federation on March 2, (No. 972p).
News.ru (2010). A system of social contracts will be introduced in Russia until 2012, News.ru, February 2, 2010; D. Nikolayeva (2010), A system of social contracts will be introduced in Russia until 2012, HRMaximum, February 2, 2010.
Social Sphere The Aid to Families with Dependent Children Program1 in the USA The Aid to Families with Dependent Children Program was active in the USA in the 1935-1996period. It often serves as an example of the program which gave rise to dependency sentiments with its beneficiaries.
The Aid to Families with Dependent Children Program was developed in such a way that it included a number of components which could contribute to a decrease in labor motivation with its beneficiaries:
- the target group of the program was single mothers who were expected to take care of their children. It was understood that in taking care of their babies those mothers would not work at least for a certain period of time;
- the program provided for relatively large payments as it was developed as a program of substitution of income;, - benefits (or a portion thereof) were ceased to be paid after a person was employed.
As a result, single mothers who received assistance under the Aid to Families with Dependent Children Program reduced by 10% to 50% the intensity of their labor activities, while the number of families -- beneficiaries of the program – increased to 5.4 million, that is, one out of twelve American families received benefits under the above program; it is to be noted that nearly 50% of the families – beneficiaries of the program – received aid within five and more years.
In 1996, the Aid to Families with Dependent Children Program was replaced by the Temporary Assistance to Needy Families Program2 which included measures aimed at motivating program beneficiaries to go to work:
some states introduced into the program a number of measures which motivated women through use of financial instruments to go to work, while in other states a requirement was made to women to go to work in order to be an eligible beneficiary of the program.
In the USA, activation of the unemployed under the Temporary Assistance to Needy Families Program is recognized as quite a success: the level of employment among single mothers substantially increased: the average level of employment of former beneficiaries of the program amounted to 60% – 75%. Also, it is noteworthy that by setting the requirement to women that they have to go to work new families will be less interested to join the program, while earlier they would have sought to become beneficiaries of it. The number of families – beneficiaries of the program – decreased from 5 million in 1994 to 2.2 million in June 1999.
The source: Moffitt, R. (1992), Incentive Effects of the U.S. Welfare System: A Review, Journal of Economic Literature, American Economic Association, vol. 30(1), March; Moffitt, R. (2002), From Welfare to Work: What the Evidence Shows, Welfare Reform & Beyond Policy Briefs, The Brookings Institution, Policy Brief No. 13, January 2002; OECD (2001–2009), Benefits and Wages: Country specific files, Country chapter for OECD series Benefits and Wage.
In Russia, the size of unemployment benefits and social assistance to families of the unemployed is not large, nor is the period of payment thereof, which factor is not expected to reduce labor motivation with that category of people. However, some surveys show that dependency sentiments do arise with recipients of unemployment benefits, particularly in rural areas. Such conclusions have been made on the basis of the results of both surveys by experts and interviews with unemployed people who admit that they prefer to have the undeclared earnings (in rural areas it is hunting, fishing, picking of wild berries and mushrooms and other) rather than have an unprivileged and low-paid job even if such vacant jobs are available. For such people, importance of registration with the employment service can be explained not only by the fact that the amount of their unemployment benefit depends on such The Aid to Families with Dependent Children (AFDC) program.
The Temporary Assistance for Needy Families (TANF) program.
RUSSIAN ECONOMY IN trends and outlooks registration, but also by the mandatory requirement to be registered as unemployed in order to be eligible for housing and public utilities subsidies 1.
Russia has experience as regards inclusion of the able bodied unemployed in employment within the frameworks of the Self-Reliance Program and From Benefit to Wages Program.
Self-Reliance Programs started to be implemented in the 2000s as municipal and regional programs in such regions as: the Perm Territory, the Tyumen Region, the Rostov Region, the Amur Region, the Samara Region, the Volgograd Region, the Republic of Komi, the Jewish Autonomous Region, Primorsky Krai and some other regions. From Benefit to Wages Programs were applied in urban areas where people had an opportunity to find a vacant job2. In some regions of the Russian Federation, for instance, in the Republic of Komi From Benefit to Wages Program is implemented up till now3. In the 2008–2010 period, regional programs of subsidies for development of the small business and self-employment with financial support from the federal budget (in the sum which does not exceed the 12-fold maximum amount of the unemployment benefit, that is, RUR 58,800) were developed and implemented as anticrisis measures.
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