unemployment benefits in st petersburg: the poverty link?

University of Glasgow

Unemployment Benefits in St Petersburg: The Poverty Link?Author(s): Kathleen YoungSource: Europe-Asia Studies, Vol. 49, No. 8 (Dec., 1997), pp. 1451-1470Published by: Taylor & Francis, Ltd.Stable URL: http://www.jstor.org/stable/154017 .

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EUROPE-ASIA STUDIES, Vol. 49, No. 8, 1997, 1451-1470

Unemployment Benefits in St Petersburg: The Poverty Link?

KATHLEEN YOUNG

THE STATED AIM OF THE RUSSIAN SYSTEM of unemployment benefits is to provide state

support for the income of registered unemployed persons during a period of active job search. While the structure of unemployment benefits appears generous on paper, the real value of benefits has sharply deteriorated since their implementation. The erosion of benefits is only partially attributable to inflation. In locking unemployment benefits to the legal minimum wage, and in failing to index this minimum wage in accordance with the rising cost of living, the Russian government has had a hand in the impoverishment of a large proportion of benefit claimants. While the deterioration of unemployment benefits has been going on since 1993-despite the introduction in that year of a mechanism for benefits indexation to guard against the effects of inflationary conditions-the scale of deterioration has been such that by 1995, the level of benefits received by most claimants has been relegated to little more than a token social payment. The situation in St Petersburg has followed this national trend. This article offers a brief overview of the State Employment Service in Russia and the system of unemployment benefits administered under its auspices. Economic and employment conditions in St Petersburg in the transition are then briefly assessed to provide a context for the examination of the impact of unemployment benefits on the household incomes of a sample of officially registered unemployed persons in St Petersburg.

The research forming the foundation of this article is based primarily on extracts from a June 1995 survey of the registered unemployed in St Petersburg, as well as official statistical information from the St Petersburg Committee for the Employment of the Population, the Federal Employment Service and Goskomstat. It also draws on existing research in the field, information obtained in interviews with officials and administrators of the Federal Employment Service, the St Petersburg Committee for the Employment of the Population and the Employment Service Scotland, other documentary materials such as policy documents, employment and unemployment legislation, and informational documents from the aforementioned sources, and personal observations of procedures in the local Employment Centres1.

Research on unemployment in Russia is subject to a number of significant limitations, the most important of which are the problems presented in the use of official statistical data on unemployment. There are three types of unemployment which can be identified in Russia. Firstly, there is that segment of the population who are, by international definitions, unemployed, but by Russian definitions are not

0966-8136/97/081451-20 ? 1997 University of Glasgow



KATHLEEN YOUNG

TABLE 1 EMPLOYMENT AND UNEMPLOYMENT IN THE RUSSIAN FEDERATION, 1992-1996 (IN MILLIONS)

1992 1993 1994 1995 1996

Labour force 75.6 75.0 74.0 73.5 73.2a In employment 72.1 70.9 68.5 67.1 66.0 Unemployed by ILO definitionb 3.6 4.2 5.5 6.4 6.8 Officially unemployedc 0.6 0.8 1.6 2.3 2.5

Unemployment rate,d ILO definition 4.8% 5.5% 7.4% 8.7% 9.3% Unemployment rate, official 0.8% 1.1% 2.2% 3.2% 3.4%

Notes: aFigure for 1 July 1996; bNot in employment, seeking employment, and available for employment; cPersons not in employment meeting Russian criteria for unemployed status, which includes registration with the State Employment Service; dAs a percentage of the labour force. Sources: Rossiiskii statisticheskii ezhegodnik 1994 (Moscow, Goskomstat Rossii, 1994), p. 61; Rossiiskii statisticheskii ezhegodnik 1996 (Moscow, Goskomstat Rossii, 1996), pp. 736-737; 'Rynok truda Rossiiskoi Federatsii', Chelovek i trud, 1996, 10, p. 4; Russian Economic Trends, 6, 1, 1997, p. 127.

officially unemployed because they have not registered with the State Employment Service. These are termed the hidden unemployed. Secondly there are the officially unemployed, or those that meet international definitions of unemployment, and are

registered with the State Employment Service. This group of unemployed is the only group eligible to receive unemployment benefits. Thirdly, there are those that are defined as partially unemployed, or are on unpaid administrative leave at the initiative of the employer (or laid off), and those facing a reduced work regime. In the third

quarter of 1996 the Labour Force Survey indicated that 9.2% of the workforce was

unemployed, whereas official registered unemployment stood at only 3.4%. This is

compounded by the additional 4.4% of the labour force on short-time work and 2.5% on unpaid or partially paid involuntary leave, deemed to be partially unemployed.2 Consequently, any study of unemployment in Russia based solely on analysis of data on the officially registered unemployed represents less than half of the story. However, this does not negate the need to research the official unemployed, as the State Employment Service directs the majority of unemployment policies and programmes to this group of unemployed. It is important to note, however, that only a

part of the total number of persons deemed by international definitions to be

unemployed are eligible, by virtue of their registration with the State Employment Service, to receive unemployment benefits. Table 1 examines the wider picture of

unemployment in Russia.

St Petersburg economic and employment conditions

Official unemployment rates in Russia have remained low throughout the transition, in sharp contrast to survey-based indicators of unemployment using ILO definitions. Levels of unemployment vary significantly from region to region, but at the time of the survey the rate of registered unemployment in St Petersburg was comparable with the national average. In May 1995 the rate of official unemployment for St Petersburg

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UNEMPLOYMENT BENEFITS IN ST PETERSBURG

was 2.1% of the economically active population. As for the structure of employment in the city just prior to the survey, on 1 May 1995 the population of St Petersburg stood at 4 829 000. The potential labour resources3 at this time consisted of 3 080 000, with 2 751 000 of these being of working age.4 The number of citizens employed in the city's economy totalled 2 189 000. Overall, 56.9% of the working population were employed in the productive sphere, and 43.1% were employed in the non-productive sphere.5 State-owned enterprises and organisations employed 43% of those employed in industrial production. Peterburgkomstat determined that throughout every month of 1995 6% to 7% of all workers in medium or large enterprises in the city were on unpaid leave or a reduced work regime.

St Petersburg has faced a number of economic shocks as a result of the reform process. In 1990 76% of the city's production was tied to the defence production of the Military-Industrial Complex (MIC).6 The impact of conversion has had serious implications for employment in the region, as many enterprises have difficulty in finding markets for their goods, and have found it difficult to switch over to civilian production. St Petersburg faces continuing falls in production, and the financial position of many enterprises and organisations remains weak as they lack funds for development and capital investment. The city is a centre for the manufacture of electrical equipment, heavy and light machinery, and consumer goods. The manufac- turing industries have been hit hard by the move to the implementation of market forces. From 1992 to 1994 industrial production declined to 52% of 1992 levels, and fell by a further 13% from 1994 to 1995.7 Industrial building and building of residential accommodation has declined, as has employment in industrial production, and the volume of transport.8 Capital investment was down to 53% of 1991 levels in 1994, and production of consumer goods stood at 49% of 1991 levels.9 The greatest contraction of the volume of production occurred in the oil-processing industry, at close to 65%; serious contractions of production also occurred in light industry (more than 30% decline), in the wood processing and cellulose and paper industries (27%), and in machine building and metal working (approximately 20%).10 In the remaining branches of industry the decline in industrial production measured anywhere from 3 to 6%.11 Consistent with many areas of Russia, decreases in industrial output far outpaced decreases in employment.12 Levels of employment in industrial manufactur- ing enterprises declined in 1995 by 12.7%.13 This sector employs 27% of St Petersburg's labour force.14 The volume of investment in industrial building declined in 1995 by 24.2%, to reach 730 billion rubles.15

The standard of living of the citizens of St Petersburg has declined sharply in the transition. Official statistics show that from February 1994 to February 1995 alone, real wages in St Petersburg declined by 10%.16 In February 1994 the ratio of the average wage to the subsistence minimum for St Petersburg was 2.7:1, but by February 1995 this had decreased to 1.6:1.17 A survey conducted by the Centre for Applied Problems of Economic Development and Employment concluded that, at the end of 1994, 14.7% of the economically active population, or 359 700 citizens of St Petersburg, were judged to be in the critical zone of economic risk on the labour market, or having a per capita household income at or below the subsistence minimum. This included (in percentages of the economically active population) 1.8% officially registered as unemployed, 4.5% not working but not officially registered as

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unemployed and having a monthly per capita household income of less than 120 000 rubles (close to the subsistence minimum at the time),18 3.7-5.5% working reduced hours without an additional income and having a per capita household income of less than 120 000 rubles; and 2.9-4.7% working full time and not having an additional income, with wages of less than 100 000 rubles a month.19 An extension of this survey concluded that in June 1995 741 300 citizens, or 30.3% of the economically active population, fell into the zone of critical economic risk.20 This same study concluded that in January 1995 53% of families in St Petersburg had a per capita income below the subsistence minimum, by February this had increased to 56%, and by March 1995 to 67% of families.21 It is clear that the economic position of certain industries, a large proportion of enterprises, and many households in St Petersburg is becoming increasingly precarious.

The state employment service

The potential for open unemployment was acknowledged in the USSR during the attempts of perestroika to restructure the existing command-administrative economy. When restructuring of the existing system was abandoned in favour of a transition to a market economy, it became clear that a 'social safety net' must be put in place to protect persons made redundant during the transition. In response to these concerns, in 1991 the USSR passed the Law on the Employment of the Population. The RSFSR passed a corresponding Law on the Employment of the Population in the same year, based on the USSR law, and which, once the Soviet Union collapsed, formed the foundation of the 1992 Russian Federation Law on the Employment of the Popu- lation. These laws recognised open unemployment for the first time since 1930, and provided a definition of unemployment. The employment laws also provided for the establishment of the State Employment Service, built on the base of job placement and training centres which existed in the Soviet system, to foster the employment of the population. The State Employment Service is the primary government agency charged with alleviating unemployment. Only unemployed persons registering with the centres of the State Employment Service are recognised as unemployed, and official unemployment statistics are based on the information gathered by the Service.

The State Employment Service features a largely decentralised multi-tier structure, and is composed of one national organisational structure, the Federal Employment Service, 89 sub-national employment centres (one for each of the constituent elements of the Russian Federation), and 2 390 area or local employment centres, which may themselves be structured into administrative sub-groupings.

The Federal Employment Service, as the central federation-wide organisational structure, sets broad objectives and guidelines in employment policy and co-ordinates national analyses of trends in the sphere of employment. National employment strategies and their corresponding budgets are formulated into an annual National Employment Programme.22

The second stratum of the State Employment Service structure consists of the Committees for the Employment of the Population in the republics, autonomous regions, autonomous districts, territories and regions and the cities of Moscow and St Petersburg. The governments of these sub-national administrative divisions are given

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primary responsibility for the development and execution of employment policies within their own area. This reflects Russian Federation law giving regions the authority to determine the structure of certain government institutions within their territory.23 Consequently, the structure of the Employment Service organs varies greatly between regions at the sub-national and local levels, according to decisions and priorities of local government. The sub-national structures formulate area unemployment policies and co-ordinate the implementation of unemployment policies, particularly active unemployment policies, by the local networks of Employment Centres.

The third tier of area, local and city borough Centres for Employment of the Population comes under the jurisdiction of the sub-national structures. The front-line of policy implementation is drawn at the local level, which operates as the main source of service provision to the unemployed. It is at this level that eligibility for unemployment benefits is determined and benefits are calculated.

The St Petersburg Committee for the Employment of the Population co-ordinates and administers measures to stabilise employment in the city. It operates 20 local Employment Centres within the city (reduced from 24 in 1994 after a reorganisation of administrative districts within the city), which themselves are grouped into four geographically based 'Associations'. The Association system was developed by the Head of the St Petersburg Committee for the Employment of the Population. Dmitrii Chereiko, to provide an intermediate level of support for advice and co-operation between local Employment Centres.24

The objectives and responsibilities of the State Employment Service are quite extensive, but can be reduced to four main spheres of activity. These are: (1) facilitating the job-matching process; (2) providing social protection; (3) developing human resources through professional training; and (4) providing labour market information.25

In job matching, the Employment Service provides information for both job seekers and employers, seeks to balance and service the needs of employers for suitably qualified workers and the needs of job seekers for employment appropriate to their skills, experience and preferences. Where necessary, job training, counselling, apti- tude tests and special assistance are utilised to achieve this goal and to make the period of job search or unemployment as brief as possible.26

Social protection takes on three general aspects under the auspices of the Employ- ment Service: the payment of unemployment benefits, payment for temporary public works jobs and temporary employment for school leavers and recent graduates, and protection for socially vulnerable groups, which may include additional benefits and/or specialised assistance in the form of vocational training or re-training specifically for those falling into this category (youth, single parents, two parent households with a high number of dependants, women with pre-school children, parents of disabled children, disabled persons, long-term unemployed, refugees and those persons nearing pension age).27

Development of human resources is directed toward those individuals who, because of the nature of their profession or skills, are unable to find employment locally, as well as those that lack or have lost their professional qualifications or skills. With the changing and evolving structure of the Russian economy moving from an emphasis

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on state-owned heavy industrial production to increased development of light industry, services and private industry, the role of the Employment Service has the potential to be highly significant in this respect. Persons officially registered as unemployed meeting the above criteria are eligible for training or retraining, paid for by the State Employment Fund, and they receive a stipend during the course of their training.

The role of the Employment Service in gathering and analysing labour market information is also crucial to the success of the economic transition. Data collected and conclusions drawn on the supply and demand for labour and changes in the labour market overall are relevant not only for the development and execution of labour market policy but for the development of general economic policy, education provision and regional development policies.28

The State Employment Fund, which was established under the 1992 Russian Federation Law on Employment, funds almost all of the activities of the Employment Service. It is an off-budgetary fund, financed primarily from a levy on the wage bills of employers. The levy was set at 1% until 1 January 1993, at which time it was increased to 2%, but it was subsequently reduced to 1.5% from January 1996.29 Local Employment Centres forward a certain proportion of funds to the next administrative level, which in turn forwards a small proportion of these revenues to the Federal Employment Service. The bulk of revenues are retained at the local level for application and distribution according to locally determined needs. Until 1 January 1994 90% of funds were retained locally; on that date the proportion of funds to be retained locally was reduced to 80%.30

The sources of revenue for St Petersburg in 1994, atypically, consisted more or less evenly of the levy on employers and self-financing activities. Some 55.2% of the revenues of the State Employment Fund of St Petersburg came from required contributions from enterprises, organisations and institutions, and 44.8% from interest on bank accounts and earnings from commercial ventures.31 The distribution of the State Employment Fund in St Petersburg was such that only 17% of the Local State Employment Fund for 1994 was allocated to social payments to the unemployed in general, and-only 9.5% of total expenditure went towards the funding of unemployment benefits.

The services of the St Petersburg Committee for Employment are not limited exclusively to the officially unemployed. In 1994, counting repeated requests for information and assistance and visitors to job fairs, the Committee for Employment received a total of 1 250 000 requests for assistance in job placement, and for consultations and information for help in solving employment problems.32 Although this number is artificially inflated by the repeat fortnightly visits of the officially registered unemployed, first-time visitors to the Committee for Employment seeking assistance in job placement numbered 156 757, and a further 163 900 turned to the Committee for Employment for consultations on employment matters.33 Of those seeking assistance with job placement, 25.7% were employed and seeking a change of employment, 2% were looking for additional employment in their spare time, 1.5% were in education and seeking part-time employment, 63.5% were not in employment, and 6.7% were from other categories (e.g. pensioners or invalids without labour recommendations).34 Of the 99 544 persons not in employment who turned to the

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Committee for Employment for the first time, 95 487, or 95.9%, were registered as officially unemployed.35 Of the total number of persons on the unemployment register in 1994 (126 800), 27.5% were placed in employment, 10.1% directed to vocational training, 4.6% put on an early pension and 22.1% were removed from the roll for various reasons.36

At the end of 1993 the official level of unemployment in St Petersburg reached 1.12% of labour resources of working age.37 One year later, at the end of 1994, the official rate of unemployment had risen to 1.63% of labour resources of working age.38 By 1 May 1995 the level of unemployment for the city stood at 1.95% of labour resources of working age (2.45% of the economically active population),39 and by the end of the year the official unemployment rate had reached 2.2% of labour resources.40 The numbers of officially registered unemployed on the roll rose from 31 340 on 1 January 1994 to 42 688 on 1 January 1995 and 55 300 at the end of 1995.41. Unemployment benefit was received by 61.8% of the officially registered unemployed at the end of 1993, and 77.1% were in receipt of benefit at the end of 1994.42

The demographic portrait of the unemployed in St Petersburg at the end of 1994 was quite interesting. Women formed 69.7% of the officially registered unemployed. This high proportion of women amongst the registered unemployed is characteristic of most regions of Russia. However, survey-based evidence on the scope of unemployment, which includes both the registered and unregistered unemployed, shows the unemployment of men and women to be more equal.43 The age structure of the unemployed exhibited the extent of the problem of youth unemployment. Young persons (age 16-29) formed 24.9% of the unemployed, and persons of pre-pension age (53 years for women, 58 years for men) formed 10.1% of the unemployed, and persons of other age groups constituted 65% of the registered unemployed.44 The unemployed are rather well educated in St Petersburg, with 28.1% at the end of 1994 having higher education, 28.1% having specialised secondary education, 32.2% having completed general secondary education, and 11.6% not having completed secondary education. The overall average duration of the length of unemployment for 1994 was 122 days, which was down from the 1993 average of 140 days.45 The share of unemployed persons finding employment within 10 days of initial registration stood at 10.0% for St Petersburg.46 Figures for January to May 1995 indicate that 85.1% had been 'dismissed' or 'released' from work, of whom 31.1% were unemployed as a result of redundancies; 0.7% were released from the military, 7.1% were graduates from educational institutions and 10.7% had had an extended (greater than one year) absence from employment.47

The system of unemployment benefits and their calculation

A system of unemployment benefit was established by the Russian Federation Employment Law, to provide for the social protection of persons officially recognised as unemployed.48 Only those persons registered as unemployed with an Employment Centre of the Federal Employment Service are eligible to receive benefits. To register, an applicant not in employment must come to the Employment Centre with their passport, labour book, documents attesting to specialised education, any documents

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KATHLEEN YOUNG

TABLE 2 NUMBER OF REGISTERED UNEMPLOYED IN ST PETERSBURG BY NUMBER IN RECEIPT OF

UNEMPLOYMENT BENEFIT, 1991-1995 (FIGURES AT BEGINNING OF MONTH)

Date

1 August 1991 1 September 1991 1 October 1991 1 November 1991 1 December 1991

Number of unemployed

1 069 3 676 6 071 7 637 8 061

Number receiving benefits

179 991

1 275 1 523 1 678

% of total receiving benefits

16.7 27 21 19.9 20.8

1 January 1992 1 February 1992 1 March 1992 1 April 1992 1 May 1992 1 June 1992 1 July 1992 1 August 1992 1 September 1992 1 October 1992 1 November 1992 1 December 1992



1 January 1995 1 February 1995 1 March 1995 1 April 1995 1 May 1995

Source: St Petersburg Committee for the Employment of the Population.

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7 318 9 251

10 462 12 059 14 300 16 441 19 149 21 616 24 354 37 505 39 873 41 304

40 744 42 967 44 358 44 467 43 916 41 709 38 313 35 669 32 626 30 337 30 014 31 064

31 340 31156 32 500 34 225 35 784 36 105 36 047 36 211 37 371 38 640 40 513 42 668

45 216 47 448 49 717 51 597 53 682

1 798 1 939 2 296 3 088 4 276 5 315 6 038 7 388 9 192

11 220 13 855 16 163

18 710 20 765 23 129 24 798 25 894 25 406 22 805 20 769 18 952 17 821 18 269 18 746

19 365 20 758 22 179 22 324 24 549 25 051 25 953 24 626 26 027 27 449 20 431 32 905

35 937 37 598 40 252 41 549 44 654

24.6 21 21.9 25.6 29.9 32.3 31.5 34.2 37.7 29.9 34.7 39.1

45.9 48.3 52.1 55.8 59 60.9 59.5 58.2 58.1 58.7 60.9 60.3

61.8 66.6 68.2 65.2 68.6 69.4 72 68 69.6 71 75.1 77.1

79.5 79.2 81 80.5 83.2




attesting to special status such as a disability certificate, and to receive benefits, a statement of their wages for the last three months in employment.49 A registration form is completed for each client, who is seen by a registration officer either on the day of registration or the next day. The registration officer interviews the client to determine their work history, educational level and employment preferences, and informs the registrant of his/her obligations to provide accurate information to the Employment Centre, what constitutes appropriate work, and that if he or she refuses two suitable job vacancies they may not be officially registered as unemployed, and subsequently not be entitled to receipt of unemployment benefits.50

The registration officer and the registrant then examine the vacancy listings for appropriate work. If the client takes an interest in a vacancy, he is referred to the employer and given another appointment at the centre within 10 days in case his application is not successful. If no appropriate vacancies are found, then the registrant is given an appointment within 10 days and is advised to continue their job search in order to be eligible for benefits. If during the registration process the registrant refuses referral to two appropriate vacancies, he may be denied benefit, and can walk out and come back in two weeks to re-register, or can be referred to the Employment Centre management for adjudication.51 It is the initial decision of the registration officer, and subsequently the decisions of the client advisers, that determine whether the registrant receives the official status of unemployed, which carries with it entitlement to benefits, or the status of 'not in employment', which does not.52

If the registrant has not found employment by the time of the first interview, and is deemed to be actively seeking work and is in compliance with Employment Service regulations, then the client is given the official status of unemployed on the next day, and unemployment benefits and social payments are calculated by the Employment Centre. To maintain entitlement to unemployment benefit, the claimant must actively assist in their own employment, comply with Employment Service rules and regulations on fortnightly interviews, obey the rules of the Employment Centre on interaction with staff, and inform the Employment Centre of all changes in their situation that may affect their entitlement to benefits.53

Unemployment benefit is payable from the first date the registrant is officially recognised as unemployed for up to 12 months over the 18 months proceeding from the original date of registration.54 Benefits are paid fortnightly in arrears, contingent on attendance at the regular fortnightly interview.55 From 1996 benefits in St Petersburg have been paid through Sberbank, having previously been paid, like pensions, through the post office. For all citizens who had paid work for at least 12 weeks in the 12 months prior to registration (changed to 26 weeks in the 1996 amendments to the Employment Law), the benefit for the first three months is calculated at 75% of the average monthly wage in the last two months at the previous job; for the subsequent four months, the benefit is calculated at 60% and from thereafter until the end of the period of benefits payments at 45%, but no less than the minimum wage and no more than the average local wage for the previous month.56

Workers made redundant, if registering with the Employment Centre within two weeks of redundancy and meeting the minimum work requirements, are eligible to receive three months of severance pay from the employer at a rate equivalent to their

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average wage, before they then receive the standard unemployment benefit. Otherwise they are entitled to two months' severance pay. However, evidence from the jobseekers survey conducted by the ILO in 1993 showed that, although required by law, employers were not informing workers made redundant of the need to register within a fortnight of being made redundant in order to qualify for the extra month's severance pay.

Claimants with dependants who are unable to work receive a supplement to their benefit for each dependant. Prior to the 1996 Russian Federation Employment Law revisions, the supplement was 10% of the average wage in the last place of employment, with the total benefit payable not exceeding the average wage at the last job.57 From 1996 this was changed to the value of one-half of the prevailing minimum wage, with the maximum supplement not exceeding one and a half times the minimum wage.5

First-time job seekers and those not meeting the employment minimum are paid unemployment benefits at the level of the legal minimum wage.59 Unemployment benefits are subject to indexation, and in accordance with Article 3 of the Law on Personal Income Tax of 7 December 1991 any benefits above the minimum wage are subject to taxation.

Failure to comply with the Russian Federation Employment Law or Employment Service rules and regulations can lead to a reduction, temporary suspension or cancellation of unemployment benefits. Benefits can be reduced by 25% for up to one month if the client fails to see a potential employer within three days of referral there by the Employment Centre and does not have a valid reason, or if the client failed to come, without valid reason, to the Employment Centre to be offered a job or training opportunity.60 Benefits may be temporarily suspended for up to three months if the client refuses two appropriate job offers, was dismissed for violations of labour discipline and conduct, fails to notify the Employment Centre of absence from the place of residence for a period greater than one month, engages in temporary or part-time employment without notifying the Employment Centre, or if the client violates Employment Service regulations on the conditions of registration and fortnightly re-registration.61 The period of suspension is counted in the total period of benefit payments. Unemployment benefit can be cancelled if fraudulent means have been used to obtain the benefit or if the client has reached the end of the period of benefit payment.62

Although anecdotal evidence suggested that the incidence of benefit fraud was quite extensive, with claimants rolling up in their Mercedes to collect their benefits, there was little hard statistical evidence on the scope of the problem of fraudulent claimants. Until the 1996 amendments to the Employment Law there was very little the Employment Service could do to combat the problem. Because benefits are calculated on the basis of the average wage in the previous place of employment, fraudsters are using doctored work records or false statements of wages to obtain a higher level of benefit. Because the work book does not show entrepreneurial activity, or some forms of work by contractual agreement, people who were in fact working had managed to obtain benefits. Now the Employment Service is permitted by the amended law to exchange information with other state organisations to expose benefit fraud. The Petrodvorets district of St Petersburg, working with tax officials, social

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services organisations and the Department to Combat Economic Crime, has, in the first month of having these powers, exposed 13 fraudulent claimants, one of whom, although officially registered as unemployed, was earning 20 million rubles a year. It is not clear whether a relationship can be made between the increased powers to combat fraud and the decline in the number of registered unemployed in the summer of 1996.

Benefit is also cancelled when the client is placed in employment, is engaged in vocational training organised by the Employment Service and is in receipt of an educational stipend, is imprisoned or subject to forced hospitalisation by court decision, or is assigned a pension (except for Group III invalidity pensions).63 Maternity leave for women made redundant within the 12 months prior to their registration with the Employment Centre is paid at the minimum wage from the Russian Federation Social Security Fund, and unemployment benefits are not paid during the receipt of maternity leave benefits.64

The bleak reality

On paper, the Russian system of unemployment benefits is very generous, leading one to believe that the unemployed would be beating a path to their local Employment Centre. However, the chasm between the theory and the practical realities of claiming unemployment benefit is illustrated by Goskomstat estimates that only 46% of the unemployed turn to the State Employment Service for assistance.5 Guy Standing, Director of the ILO's Central and Eastern European Team, has identified no less than 12 barriers or disincentives to registration with the State Employment Service, and consequently to the receipt of unemployment benefit.66 An examination of just those disincentives directly related to unemployment benefits shows that these disincentives are not insignificant.

Success in registering officially as unemployed does not guarantee eligibility for the receipt of unemployment benefits. In November 1996 only 90.9% of the registered unemployed were deemed eligible for benefits.67 Failure to show a propiska, or internal passport entitling one to residence in a particular area, when registering as unemployed invalidates any claim to benefits. Persons officially made redundant by their employer and in receipt of two to three months of severance pay are not eligible for the receipt of unemployment benefit until the cessation of such payments.

Only a small proportion of the registered unemployed in Russia (8% in 1996) have officially been made redundant by their previous employer.68 The vagaries of Russian employment and tax legislation create disincentives to enterprises to make superfluous workers redundant. Unnecessary workers are retained on enterprise books by being placed on involuntary unpaid or part-paid leave, with little hope of returning to work. In doing so, enterprises avoid having to make redundancy payments should the worker leave voluntarily, and could artificially manipulate the average enterprise wage downward in order to side-step punitive taxes. Many of those placed on partially paid leave receive the minimum wage, which stands at just a fraction of the physiological subsistence minimum, or a level of pay which does not meet the subsistence minimum. This nominal attachment to the workplace, however, makes these workers ineligible to register as unemployed. Should those on involuntary leave

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decide to quit, they are not entitled to severance pay, and the impact of their leave on their average wage in the last three months of employment makes it increasingly likely that the individual will receive either very low or the minimum level of benefit. Workers on involuntary leave face a difficult choice between receiving little or no pay, not working, but maintaining access to workplace-based services, or severing ties with the workplace, registering with the State Employment Service, and possibly receiving low levels of benefits but subjecting themselves to strict conditions for maintaining benefit entitlement. Those choosing the first of these options may engage in informal economic activity in their period of involuntary leave, or take up employment in the secondary economy, while still 'officially' tied to their original place of work. Persons who have already had a long separation from employment are also, if deemed eligible for benefit, likely to receive the minimum benefit owing to the erosion of their previous average wage by inflation.

Unemployment benefits in St Petersburg

The proportion of officially registered unemployed in St Petersburg receiving unemployment benefits has risen steadily since the establishment of the benefits system. In May 1995 83% of the unemployed were in receipt of benefits.69 However, the real value of these benefits as a form of social protection in inflationary conditions is questionable. Declining inflation may restore some value to unemployment benefits, but by tying benefits to average wages in the previous place of employment and to the minimum wage, the Russian Government has made benefits extremely vulnerable to inflation. The impact of inflation on the manner in which benefits are calculated has resulted in a high proportion of the unemployed receiving the minimum benefit, equivalent to the minimum wage. New entrants to the labour force, the long-term unemployed, those who have been out of the labour force for an extended amount of time, and persons formerly in low-wage employment are more likely to be receiving the minimum level of benefit, and in St Petersburg in the period from January to May 1995 35.1% of those receiving benefits were receiving the minimum level. Unem- ployment benefits at the minimum level are so small that they cannot truly be considered to be a replacement income in a time of active job search, when the size of the minimum wage is compared to the subsistence minimum and the average wage. In 1994 the minimum wage was less than 9% of the average wage, and in December 1994 it stood at only 14% of the subsistence minimum.70

Those receiving the average level of benefit fared little better. In December 1994 the average unemployment benefit received in St Petersburg was 89 700 rubles a month, or 58.6% of the subsistence minimum of 153 100 rubles, and 26.8% of the average local monthly wage of 334 800 rubles.7' Although the average amount of unemployment benefit had increased by four times from its level at the beginning of 1994, at no time did the average level of benefits reach the subsistence minimum.72 By February 1995 the value of the average unemployment benefit had deteriorated further, standing at only 50.9% of the subsistence minimum, and 32.2% of the average wage.73 At the same time, the average wage was only 1.6 times the value of the subsistence minimum.74 It is those households where benefits form a significant part of their income whose financial security is tenuous. In 1994 social payments

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constituted 17% of the Committee for Employment's total expenditure for the year.75 This includes not only unemployment benefits but also additional material payments, early pensions, the costs of vocational training (including the payment of stipends), the financing of public works, temporary works programmes and the Youth Practicum project. Unemployment benefits alone would constitute 9.5% of the annual distribution of the St Petersburg State Employment Fund.

Supplementary assistance to the unemployed

Article 39 of the 1992 Russian Federation Employment Law stipulates that unemployed persons whose entitlement to receipt of unemployment benefit has expired, and their dependants, are eligible for the receipt of additional material assistance.76 However, the type and structure of material assistance provided was only clarified in Federal Employment Service Order Number 78 of 18 June 1993, 'On Provision of Material Assistance to the Unemployed and Their Family Members Who Are Their Dependants'. According to this order, material assistance may come in the form of monthly payments, lump sum payments, financial transfers and vouchers.77 To qualify for material assistance, the family per capita income of the unemployed individual, including unemployment benefits and supplements for dependants, must be less than twice the minimum wage; they must continue to attend fortnightly interviews after their entitlement to benefits has ended, or throughout their first period of registration as unemployed if material assistance is being offered to family members in the household, and must be ready to enter into paid employment, including temporary, at the first available opportunity.78

In accordance with Article 36 of the 1996 Russian Federation Employment Law, persons who are in receipt of stipends, pensions or unemployment benefit are not entitled to material assistance; nor are persons finding themselves on other forms of state support, such as those in specialised education or individuals living in children's homes.79 Monthly payments provide subsidies for rent, utilities, the use of public transport, health care and the use of public eating facilities, and are payable to the claimant for a period of up to six months.80 Material assistance of this type is also extended to the dependants of unemployed persons considered to be in need of social protection for a period of up to 12 months.81

Lump-sum payments are made to these groups in the case of the death of a family member living with the unemployed person on whom the unemployed person is dependent, or in case of the death of the unemployed person himself, but only one such payment may be made.82 Dependants of an unemployed women on maternity leave are entitled to only one lump-sum payment of material assistance.83 Monthly payments may not exceed the average local wage, and lump-sum payments are not to exceed twice the monthly minimum wage.84 Persons made unemployed as a result of redundancies are, by Article 13 of the Russian Federation Employment Law (1992 and 1996 versions) entitled to preservation of their place on the waiting list for housing or improvement of living conditions, and are entitled to use the pre-school establishments for children at their previous place of work.

Supplementary material benefits were only received by an average of 30 people per month in St Petersburg in the first quarter of 1995.85 Because of the limited use of

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supplementary material benefits in St Petersburg, the survey concentrated solely on the impact of unemployment benefit. The reasons for such limited use of supplementary assistance are unclear, but the fact is interesting in itself. A number of possible explanations are that very few people are actually in desperate need, that the Committee for Employment has succeeded in placing people in employment before they find themselves in need of supplementary assistance, or that very few have fulfilled the strict conditions of entitlement to additional support.

Survey results

Excerpts from a survey of the registered unemployed in the Kalininskii raion of St Petersburg illustrate the impact of unemployment benefits on the household incomes of the registered unemployed in St Petersburg. The survey consisted of personal interviews with officially registered unemployed persons, using a standardised ques- tionnaire. The sample was designed on the basis of labour market information provided by the St Petersburg Committee for the Employment of the Population according to the sex and age profile of the registered unemployed at the time of the survey. Interviews were completed with 172 registered unemployed persons visiting the Kalininskii raion Employment Centre of the St Petersburg Committee for the Employment of the Population from 5 to 15 June 1995. Owing to the sample size and geographical limitations, the results of the survey should be interpreted specifically as a case study of official unemployment in the Kalininskii raion of St Petersburg, and should not be extrapolated to the regional or national level, nor should it be construed to represent other types of unemployment.

The receipt of benefits

Of the registered unemployed, 66% said that they were currently in receipt of unemployment benefits. A further 2% of total respondents had received benefits in the past but were no longer entitled to receive them. Those who were not receiving benefits at the time of the survey but would be receiving benefits in the future (new registrants with the Employment Service not yet receiving benefits (17%) and those still in receipt of severance pay (4%)) totalled 21% of the sample. Benefits were not received by 11% of respondents. Official figures indicated that of those persons registering as unemployed in January to May 1995, 88% in St Petersburg were assigned benefits, and the survey evidence would seem to support this if those not yet receiving benefits but due to receive them are included.86

The ILO's 1993 jobseekers survey of visitors to the Employment Centres in Leningrad oblast' concluded that women were more likely to be currently in receipt of benefits than men. The St Petersburg survey displayed the same result. While 72% of women were in receipt of benefits at the time of the survey, only 50% of men were. However, a larger share of men (35%) would be receiving benefits in the future, either once they had completed the registration process or once their entitlement to severance pay had expired, while only 15% of women had a future entitlement to benefits. A slightly greater proportion of men than women were not in receipt of

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benefits-15% for men as opposed to 13% for women. The discrepancy can be attributed to the fact that a greater proportion of new registrants were men.

Despite the arduous task of registering, the majority of respondents who had been in receipt of benefits found obtaining benefits somewhat easy (33%) or very easy (45%), whereas only 16% found it somewhat or very difficult to obtain benefits. The growing proportion of the registered unemployed receiving unemployment benefits throughout 1992 to 1995, and the ease with which they are obtaining benefits, may indicate that the Employment Service itself is viewing unemployment less as psychologically aberrant behaviour and more as a product of economic transition.

The survey did not support the commonly held view that the main motivation for turning to the Employment Service was to receive benefits, but instead found that motivation was split fairly evenly between the possibility of finding appropriate work (34%), the possibility of receiving unemployment benefits (32%) and the possibility to receive training in a new or supplementary profession (33%). As we shall see, the levels of benefits make for a poor motivation for turning to the Employment Service.

Benefit levels and their relationship to the minimum and average wage

The transition process has intensified the problem of poverty in Russia, and the unemployed are particularly vulnerable. The level of unemployment benefits appears generous on paper, but inflation, the benefits structure and entitlement conditions have eroded their value. Much of the evaluation of the benefits is conducted taking the subsistence minimum as a point of comparison, which is calculated on the basis of a basket of foodstuffs and essential goods and services. It is not a generous subsistence minimum, and is actually based on the third, most austere determination by the Ministry of Labour of the bare minimum of consumption necessary for physiological survival. Of this basket of goods and services, 69% of its total goes to the cost of food, 19% on basic consumer goods, and 12% on services and taxes. The level of benefit received by most respondents stands at a fraction of the subsistence minimum. It is not surprising then that over two-thirds of respondents (68%) stated that their benefits did not meet the cost of food, while 19% felt their level of benefit was sufficient only for the purchase of food, and 12% found it sufficient for the purchase of food and payment for communal services.

The average amount of benefit received monthly by the respondents was 127 941 rubles, far below the average subsistence minimum at the time of the survey of 279 160 rubles. Of those receiving benefits, 23% were receiving the bare minimum benefit, equivalent to the minimum wage, which was 43 700 rubles in June 1995. In comparison, the average wage for June was 459 200 rubles. Thus, the minimum wage, also the base level of unemployment benefit, comprised only 16% of the subsistence minimum and 10% of the average wage in June 1995. The number of persons receiving a level of benefit consistent with the minimum benefit plus supplementary payments for dependants would bring the total receiving minimum benefit to 35%. This compares with official data, from January to May 1995, indicating that 35% of the registered unemployed in St Petersburg were receiving the minimum level of benefit. Approximately two-thirds (65%) of the registered unemployed were receiving benefits at or less than half of the subsistence minimum, and

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overall, the proportion of respondents receiving benefits at a level below the subsistence minimum at the time of the survey was 90%. Only 10% of respondents were receiving benefits falling between the subsistence minimum and the average wage.

Despite the low levels of benefits in relation to the subsistence minimum and the average wage, 38% considered the benefit to be a significant contribution to household income. This would seem to indicate that the welfare of some households with an unemployed member is at least partially dependent on the receipt of unemployment benefit to maintain some standard of living, albeit minimal.

Although unemployed persons have the right to receive certain non-wage work- based benefits from the former employer for a period after becoming unemployed, (such as child care and medical services), the survey revealed that relatively few of the respondents were offered any benefits through the employer even while still employed. The majority of respondents (57%) claimed that they received no employer benefits from the previous place of employment. Medical services (28%) and sanatorium and rest home visits (19%) were the most common benefits provided while employed, which the unemployed still have access to if they are made redundant for the official reasons of liquidation of the enterprise or reduction of staff.

The financial position of households with an unemployed member

For the one-third of respondents who stated that no member of the household was working, and the 4% of respondents whose sole household income was unemployment benefit, the economic position of the household is precarious indeed. However, households having other sources of income are also vulnerable to poverty. Just over three-quarters of respondents had a per capita monthly income below the subsistence minimum. Although a larger proportion of the registered unemployed are receiving benefits, it would appear that the unemployment benefit system provides insufficient support for the unemployed, and does not fulfil its role as a safety net. The survey mentioned previously, conducted by the city's Economic Mathematical Institute of the Russian Academy of Sciences, found that the material position of unemployed households was worse than that of all other categories of the population in St Petersburg except pensioners.

The low level of state benefits in relation to the subsistence minimum, not just of unemployment benefit but of other state benefits such as work and disability pensions, stipends and child benefit as well, increases the importance of employment income of other household members to maintaining the standard of living of the household. The largest proportion of respondents had one wage earner in the household, with 44% stating that this was the case. However, 34% stated that there was no wage earner in the household.87 Two persons were working in 20% of respondents' households, and three or more persons were working in 2% of respondents' households.

Respondents were asked what other sources of income the household had, given the loss of regular income through unemployment of one household member. Six respondents, or 4% of the sample, had no household income other than unemployment benefit. In the majority of households (66%) the wages of other family members

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contributed to household income. Private farming provided additional income for 27% of respondents. Another 24% of households received income in the form of a family member's pension. Other main sources of income were financial assistance from relatives outside the household, personal savings and income earned from odd jobs. Some 38% of households had one source of income in addition to the unemployment benefit, 30% had two additional sources of income, 28% had three or more additional sources of income, and 6% had four or more sources of additional income.

Sources of additional income did not ensure the financial security of the household. The average household per capita monthly income was 195 740 rubles. Per capita monthly income was below the subsistence minimum for 80% of respondents, and only 20% had a per capita monthly income above the subsistence minimum. Of households with only one wage earner, 92% had a monthly per capita income below the subsistence minimum.88

Conclusion

Measures to support the incomes of the registered unemployed are of minimal effect. While the percentage of registered unemployed receiving benefits has grown from 1992 to 1995, the value of benefits has been eroded to the point where the majority of benefit claimants are now receiving a fraction of the subsistence minimum. Despite the existence of a social safety net for the unemployed, the structure of unemployment benefits is such that a large share of the registered unemployed are vulnerable to poverty. Not only are an overwhelming majority of the registered unemployed receiving unemployment benefit at a level below the physiological subsistence minimum exposed to poverty, but four-fifths of households having an unemployed member have a per capita income below the poverty line. The safety net for the unemployed remains insufficient. While all governments seek to fix unemployment benefits at a level which preserves the motivation to return to employment, in Russia this has been achieved to an extreme. The example of St Petersburg illustrates the decline in the value of unemployment benefits replicated throughout Russia.

Unemployment is not solely an economic issue; its impact extends to the political and social sphere. Should levels of registered unemployment begin to rise, as is anticipated, or should even a part of hidden unemployment move to registered unemployment, the State Employment Service will face considerable strains to carrying capacity and resources. Without a restructuring of the system of unemployment benefits, such a rise would be likely to result in a growth in the proportion of the population living in poverty. The social and political ramifications of an increase in registered unemployment have the potential to compound the difficulties of economic and employment restructuring in Russia.

IREES, University of Glasgow

The author would like to thank the Institute of Russian and East European Studies, the University of Glasgow, and BASEES for their kind support of this research. Special thanks also go to L. Panova and N. Rusinova of the St Petersburg Branch of the Institute of Sociology, T. Chekulaeva of the SPCEP, and the staff and clients of the Kalininskii raion Employment Centre, without whose assistance this research would not have been possible. 2 Russian Economic Trends, 6, 1, 1997, p. 126.

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3 The SPCEP defines potential labour resources to be the total of persons working, in study, serving in the armed forces and not employed. This figure includes those persons in work who are outside the working ages of 16 to 54 for women and 16 to 59 for men. This figure excludes disabled persons of working age who are unable to work. According to SPCEP calculations, 329 000 residents of St Petersburg outside the working age range are in employment.

4 Department for Analysis of the Labour Market, Spravka: trudovye resursy S-Pba:itogi raboty KZN SPb v yanvare-aprele 1995 (St Petersburg, St Petersburg Committee for the Employment of the Population Internal Document SPR0104, 10 May 1995). 5 Ibid.

6 Natal'ya Mironenko, 'Tsel'-spokoinaya zhizn' i normal'naya rabota', Chelovek i trud, 1996, 3, p. 4.

7 K. Muzdybaev, Dinamika urovnya zhizni v peterburge 1992-1994 (St Petersburg, Smart, 1995), p. 20; Sankt peterburgskie vedomosti, 30 January 1996.

8 Saint Petersburg Committee for the Employment of the Population-Department for Analysis of the Labour Market, Obzor rezul'tatov raboty komiteta po zanyatosti naseleniya sankt-peterburga v yanvare-marte 1995 goda (St Petersburg, St Petersburg Committee for the Employment of the Population, 1995), p. 3.

9 Muzdybaev, p. 20.

10 Ibid. " Ibid. 12 Ibid., p. 77. 13 'Proizvodstvo ozhivaet', Chelovek i trud, 1996, 3, p. 64. 14 Ibid. 15 Ibid. 16 Obzor rezul'tatov raboty komiteta po zanyatosti naseleniya sankt-peterburga v yanvare-marte

1995 goda, p. 39. 1 Ibid. 18 At the time of the survey this figure would have equated roughly with the subsistence

minimum for St Petersburg which stood at 106 200 rubles in October, 134 300 in November, and 153 100 in December 1994.

19 St Petersburg Committee for the Employment of the Population, Sluzhba zanyatosti sankt peterburga v 1994 godu (St Petersburg: St Petersburg Committee for the Employment of the Population, 1995). p. 35.

20 G. Gendler & M. Gil'dingersh, 'Sotsial'nye posledstviya bezrabotitsy', Chelovek i trud, 1996, 3, p. 49.

21 Muzdybaev, p. 164.

22 National Employment Programmes were established on an annual basis through 1995. In 1996 the National Employment Programme was established for 1996 to 1997.

23 Ludmila Nemova & Doug Lippoldt, 'Implementation of Labour Market Policy by the Russian Employment Service: A Case Study', in Stefano Scarpetta (ed.), The Regional Dimension of Unemployment in Transitional Countries: A Challenge for Labour Market and Social Policies (Paris, OECD, 1995), p. 468.

24 Interview with Catherine Rainey, Employment Service Scotland, 23 April 1996. 25 Organisation for Economic Co-operation and Development, Centre for Co-operation with

Economies in Transition, Enhanced Labour Market Monitoring: Unemployment in the Russian Federation (Paris, OECD-CCET, 1994), pp. 9-11.

26 Ibid. 27 Ibid. 28 Ibid. 29 Interview with Ol'ga Grigorevna Mil'ko, Federal Employment Service, July 1995; 'O tsifrakh

strakhovykh vznosov v pensionnyi fond rossiiskoi federatsii, gosudarstvennyi fond zanyatosti naseleniya rossiiskoi federatsii, i v fondy obyazatel'nogo meditsinskogo strakhovaniya na 1996 god', No. 207-FZ, 21 December 1996.

30 Nemova & Lippoldt, p. 486. 31 Sluzhba zanyatosti sankt peterburga v 1994 godu, p. 32. 32 Ibid., p. 7. 33 Ibid., p. 5. 34 Ibid., p. 67. 35 Ibid., pp. 10, 67. 36 Ibid., p. 4. 37 Spravka: trudovye resursy S-Pba:itogi raboty KZN SPb v yanvare-aprele 1995.

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38 Sluzhba zanyatosti sankt peterburga v 1994 godu, p. 5. 39 Spravka: trudovye resursy S-Pba:itogi raboty KZN SPb v yanvare-aprele 1995. 40 Dmitrii Chereiko, 'V tsentre vnimaniya-rabotodatel', Chelovek i trud, 1996, 3, p. 5. 41 St Petersburg Committee for the Employment of the Population-Department for Analysis of

the Labour Market, Chislennost' bezrabotnykh po sankt peterburga v 1991-1994 g.g. (St Petersburg, St Petersburg Committee for the Employment of the Population, Internal document, 1995); St Petersburg Committee for the Employment of the Population - Department for Analysis of the Labour Market, Chislennost' bezrabotnykh po sankt peterburga v 1993-1995 g.g. (St Petersburg, St Peters- burg Committee for the Employment of the Population Internal document, 1995); and Cherneiko, 'V tsentre vnimaniya-rabotodatel', p. 5.

42 Chislennost' bezrabotnykh po sankt peterburga v 1991-1994 g.g.; Chislennost' bezrabotnykh po sankt peterburga v 1993-1995 g.g.

43 L. S. Rzhanitsyna & G. P. Sergeeva, 'Zhenshchiny na rossiiskom rynke truda', Sotsiologiches- kie issledovaniya, 1995, 7, pp. 57-62; Sheila Marie & and Albert Motivans, 'Women in the Labour Market and Female Unemployment in Russia, Latvia and Uzbekistan', paper presented to the World Bank Europe and Central Asia Region Seminar on Gender in Transition, Bucharest, Romania, 1-2 February 1995. Marnie & Motivans describe the three prevailing explanations for the high represen- tation of women amongst the registered unemployed. These are (1) that mass lay-offs have not yet begun, and that once mass redundancies hit production work, gender becomes less of a determining factor; (2) managers lay off female employees first if wage costs need to be cut; and (3) that women have a greater propensity to register with the State Employment Service, and hence are more prevalent in the official unemployment figures.

44 Chislennost' bezrabotnykh po sankt peterburga v 1991-1994 g.g.; Chislennost' bezrabotnykh po sankt peterburga v 1993-1995 g.g. The pension age for women is 55 years, and for men 60 years. Pre-pension age is defined to be those persons within two years of pension age, i.e. women aged 53 and 54 years and men aged 58 and 59 years.

45 Sluzhba zanyatosti sankt peterburga v 1994 godu, p. 53. 46 Ibid., p. 48. 47 Ibid. 48 According to Article 3 of the 1992 Russian Federation Employment Law and the 1996

revision to the law, an unemployed person is defined to be an able-bodied citizen of working age who does not have a job and wage, is registered with the Employment Service as searching for work, and is prepared to begin work. Persons who are under the age of 16, are in receipt of a work pension, who have refused two appropriate job offers from the Employment Service within 10 days of their application, and first-time job entrants or persons with no profession who refuse two offers of training or any paid job, including temporary, are not eligible to be registered as unemployed.

49 St Petersburg Committee for the Employment of the Population, Esli vam nuzhna rabota: pamyatka bezrabotnomu, Informational leaflet (St Petersburg, St Petersburg Committee for the Employment of the Population, 1995). Prior to the 1996 revisions, the statement was to be of the average earnings of the last two months at the last place of employment. 50 Federal Employment Service, Work Procedures of the Employment Exchange (Moscow, Federal Employment Service, 1992), p. 7. Article 4 of the Russian Federation Employment Law (1992 and 1996 versions) stipulates that a job is considered appropriate if it corresponds to the professional qualifications, previous work experience and health conditions of the individual, and is within the bounds of available transport from the place of residence. For first-time job seekers, persons with no profession or trade, persons registered as unemployed for 12 months who have refused offers of retraining, and persons who have not worked for the past three years and have refused offers of training, any type of paid work, including temporary, is considered to be appropriate. Jobs requiring an involuntary change of residence, not meeting health and safety norms, offering a wage lower than the average wage of the individual in the last two months in employment (or not less than the average wage of the territorial unit where the individual's wage was above the average local wage), and public works jobs cannot be considered appropriate. 51 Ibid., p. 8.

52 In disputes which may affect the client's entitlement to benefit, the case is referred to the Employment Centre's legal counsellor, or Director, where no legal counsellor is employed. Decisions are made in accordance with Federal Employment Service regulations, and supplementary legislation from the region or area. In the case of a conflict of regulations, those of the higher body take precedence. If a decision is made against the claimant, then they are informed of their right to appeal to the Director of the Employment Centre, the next level of the Employment Service, or to the Courts of Law. Work Procedures of the Employment Exchange, pp. 27-28.

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53 Text of zayavlenie or statement signed by each registrant stating that they will comply with the Russian Federation Employment Law.

54 Russian Federation Employment Law (1992), Article 34.2. This appears as Article 31.3 of the 1996 version.

55 Russian Federation Employment Law (1992), Article 34.3 (Article 31.6 of the 1996 version). 56 Russian Federation Employment Law (1996), Article 30.2. Prior to the 1996 revisions, the

minimum period of paid employment in the past 12 months was 12 weeks, in accordance with Article 36 of the 1992 Russian Federation Employment Law.

57 Russian Federation Employment Law (1992), Article 33.2. 58 Russian Federation Employment Law (1996), Article 30.3. 59 Russian Federation Employment Law (1992), Article 36. This appears as Article 34 of the

1996 version. 60 Russian Federation Employment Law (1992-Article 38.5) (1996-Article 35.5). 61 Russian Federation Employment Law (1992-Article 38.3) (1996-Article 35.3). 62 Russian Federation Employment Law (1992-Article 38.2) (1996-Article 35.2). 63 Ibid. 64 Russian Federation Presidential Decree, 'On Measures for the Social Support of Citizens Who

Have Lost Their Work and Wages (Income), and Who are Recognised as Unemployed in the Established Order', No. 723, 2 July 1992, Article 3.

65 Russian Economic Trends, 6, 1, 1997, p. 126. 66 Guy Standing, 'Why Measured Unemployment in Russia is So Low: The Net With Many

Holes' Journal of European Social Policy, 4, 1, 1994, pp. 35-49. 67 Russian Economic Trends, 6, 1, 1997, p. 126. 68 Ibid., p. 127. 69 Chislennost' bezrabotnykh po sankt peterburga v 1991-1994 g.g.; Chislennost' bezrabotnykh

po sankt peterburga v 1993-1995 g.g. 70 Russian Economic Trends, 3, 4, 1995, p. 53. 71 Sluzhba zanyatosti sankt peterburga v 1994 godu, p. 88. 72 Ibid., pp. 40, 61. 73 Obzor rezul'tatov raboty komiteta po zanyatosti naseleniya sankt-peterburga v yanvare-marte

1995 goda, p. 39. Ibid.

75 Sluzhba zanyatosti sankt peterburga v 1994 godu, p. 32. 76 This appears as Article 36 in the 1996 version of the Employment Law. 77 Promyshlennaya Akademiya, Praktika primeneniya zakonodatel'stva o zanyatosti naseleniya

v Rossiiskoi Federatsii (Lyubertsy, Lyubertsy Employment Service, 1993), p. 49. 78 Ibid., p. 50. 79 Russian Federation Employment Law (1996-Article 36.1). 80 Praktika primeneniya zakonodatel'stva o zanyatosti naseleniya v Rossiiskoi Federatsii, pp. 49,

51. 81 Ibid. 82 Ibid., p. 50. 83 Ibid., p. 51. 84 Ibid. 85 Federal Employment Service, Osnovnye pokazateli deyatel'nosti organov gosudarstvennoi

sluzhby zanyatosti v yanvare-mae 1995 goda, Statbyulleten' No. 5 (Moscow, Federal Employment Service, 1995), p. 9.

86 Ibid., p. 7. 87 For the purpose of the survey, the household was defined to be persons living together in the

same domicile under the same household economy (including children, parents and other close persons).

88 These figures are calculated on the basis of the average subsistence minimum. The subsistence minimum is calculated at different levels for able-bodied men, able-bodied women, pensioners, children under the age of 7 and children aged 7 to 15 years.

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unemployment benefits in st petersburg: the poverty link?

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