Strengths and Weaknesses of Self-Employment and Platform Work in Russia

Abstract

The paper assesses the risks incurred through self-employment and platform work in Russia, which arise because the basic mechanisms for mandatory social insurance are lacking for these workers. As part of their research methodology, the authors used expert assessments based on extensive interviews with the management of large digital platforms and with representatives of trade unions, government authorities, and insurance companies. The authors also relied on the profiles regarding the forms of employment under study using data generated by the Federal Tax Service, the Federal Statistical Service, and a telephone survey of research staff of the Russian Academy of National Economy and Public Administration and CEOs of a number of large digital platforms. The authors assess the risks involved in self-employment and platform work as they relate to the characteristics of the employed and to commercial risks, including those encountered by insurance companies that issue policies to self-employed and platform workers. A separate assessment was carried out for exposure to risks from implementing various policy scenarios: 1) bringing self-employed and platform workers into the compulsory social insurance system; 2) restricting them to non-state social insurance; or 3) requiring platforms to provide social guarantees to their employees or act as social insurance agents for their workers. The authors conclude that it is impractical to provide self-employed and platform workers with the same kind of social security that formally hired labor enjoys. A fundamentally new approach to providing social guarantees to the self-employed and platform workers would be necessary to minimize their social risks, and any such approach would have to address the risks and challenges identified in this study.