Ol'ha Ivashchenko
Work transformation within post-soviet transit: sociological peculiarities of Ukraine’s case
OL'HA IVASHCHENKO,UDC 316.334.2, 316.422
PhD in Ap plied So ci ol ogy, Se nior Re search Fel -
low of the So cial Struc tures De part ment, In sti tute
of So ci ol ogy of the NAS of Ukraine
Work transformation within post-soviet transit:
sociological peculiarities of Ukraine’s case1
Ab stract
Ukraine as a spe cific ex am ple of the post-so viet tran si tion coun try with prac ti cally
non-struc tured econ omy (that means only par tial changes made against the back -
ground of pro longed use of pre vi ously formed eco nomic re sources) has dis played a
strong in ter de pen dence be tween mar ket, la bour, state and dem o cratic pro cesses. The
two his toric pro jects of state build ing and mar ket build ing, car ried out si mul ta neously
since the early 1990s, have dis tinctly re vealed the “so viet birth marks”, which both pol i -
ti cians and the so ci ety find dif fi cult to re move. Af ter the USSR’s pol icy of full em ploy -
ment had been bro ken, or di nary work ing peo ple faced the ex pe ri ence of be ing un em -
ployed, which they had never known be fore. How ever, Ukrai nian pol icy mak ers turned
out to be un able to of fer a proper em ploy ment pol icy. There fore, pro cesses oc cur ring in
la bour sphere of the post-so viet Ukraine rep re sent both ca sual em ploy ment and new
ten den cies of free market aspirations with development of a private owner’s con -
scious ness.
The pa per’s re search ques tion is to un der stand and ex plain routes and rea sons for
mar ket trends in la bour sphere and their cru cial in flu ence on Ukraine’s so cial trans for -
ma tion.
Keywords: full em ploy ment, tran si tion/redistributive/mixed econ omy, self- em ploy -
ment, in for mal em ploy ment
In the be gin ning, it would be use ful to men tion a very im por tant and still
valu able re mark made by Neil Fligstein: “There are two great in sti tu tion-build ing
Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2 151
1 The paper was presented at the 12th ESA (European Sociological Association) Confe -
rence “Differences, Inequalities and Sociological Imagination”, RN09S10b, Prague, 25–28
August 2015.
pro jects go ing on in post-so cial ist so ci et ies: state build ing and mar ket build ing. These 
pro jects can not be di vorced from one an other be cause much of state build ing is
about mar ket build ing, both in terms of set ting rules for mar kets and the state’s role
in mar kets and also de cid ing how so ci et ies will re spond to mar kets in fields like so cial
pol icy. This pe riod in the for mer so cial ist so ci et ies is like the 1880–1920 era for the
ad vanced OECD coun tries in that the ba sic out lines of in sti tu tions are be ing laid
down” [Fligstein, 1996: p. 1080–1081].
Socio-eco nomic dif fer ences be tween coun tries of Cen tral and East ern Eu ro -
pe, dis played for the last twenty years, rep re sent the im pact of dif fer ent eco nomic
re gimes, in clud ing em ploy ment pol icy op tions, against the back ground of a pre -
vi ous po lit i cal-eco nomic re gime and so cial ex pe ri ence (that is the so-called “path
de pend ence”, or “in her i tance”). “Al though dif fer ences in tra jec to ries of tran si -
tions across re form ing state so cial ist and post-com mu nist so ci et ies have be come
more pro nounced over time, path de pend ence is likely to re sult in struc tural sim i -
lar i ties across tran si tion so ci et ies” [Nee, Matthews, 1996]. The prob lem is that
some coun tries of this re gion have prop erly im ple mented eco nomic re forms
through eco nomic re struc tur ing while the oth ers have only made par tial changes
or taken just a very few re-or gani sa tion mea sures, which, in fact, are noth ing but
pro long ing the use of pre vi ously formed eco nomic re sources. Ukraine is a coun -
try that has been un der go ing post-so viet tran si tion hav ing prac ti cally non-struc -
tured econ omy and con tin u ing to ex ploit the So viet Un ion’s huge heavy in dus -
trial fa cil i ties — a typ i cal ex am ple of the mid-20th cen tury’s econ omy, prim i -
tively shrunk in the last twenty years. As the econ omy has nei ther been re struc -
tured nor mod ern ised in keep ing with tech no log i cal chal lenges and to day’s
needs, the only ma jor change hap pened to be mar ket-like is privatisation of in -
dus trial fa cil i ties by se lected rep re sen ta tives of the nomenklatura1 and “red di rec -
tors”, who have got used to be ing re cog nised as real win ners of the post-so viet
tran si tion due to le git i ma tion of the state-owned prop erty. On the other side,
work ing peo ple as an ideo log i cal “em bodi ment” of so viet re gime were urged to
tap ex pe ri ence of job seek ing, which was un known to them, af ter the ideo log i cal
rule “one life, one job”, adopted for the ma jor ity of peo ple, had been bro ken. Dur -
ing the whole post-so viet pe riod, Ukrai nian pol i ti cians turned out to be un able to 
of fer any kind of em ploy ment pol icy fol low ing vi tally needed but prac ti cally ab -
sent eco nomic re struc tur ing. Be sides, it needs to be men tioned that lead ing cad -
res of the Com mu nist Party could only per form a com mand-ad min is tra tive man -
a ge rial ac tiv ity, so they were ab so lutely un pre pared for mar ket re al i ties. The
word “mar ket” was firstly pro nounced by the last Chair man of the Coun cil of
Min is ters Nikolai Ryzhkov in 1990. At the same time, in June 1990 the ma jor ity
in the Ukrai nian par lia ment, which con sisted of com mu nists and “red di rec tors”,
formed the in flu en tial “Group of 239” whose slo gan was “For the sov er eign so viet
Ukraine!” (which, in its turn, was a real rea son for the coun ter-rev o lu tion af ter
1991, as some Ukrai nian and Eu ro pean pol i ti cians called it). There fore, Ukrai ni -
152 Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2
Ol'ha Ivashchenko
1 The word “nomenklatura” is derived from the term “nomenclature” (which, in turn, means
a system for giving names to things within a particular profession or field) and used to
designate a population stratum in the states of former socialist camp, which occupied various
key administrative positions in Communist Party, central and local authorities, as well as in
the spheres of industry, agriculture, education and health care.
ans since the early 1990s have been ex pe ri enc ing new life and work ing chal lenges
that are the ex act op po site of life time full em ploy ment pol icy and so viet ide ol ogy
based on ab o li tion of the in sti tu tion of pri vate prop erty as a main idea for build -
ing com mu nism, ac cord ing to Karl Marx and Friedrich Engels’ “Man i festo of the
Com mu nist Party”. There is a need to clar ify the mean ing of full em ploy ment in
So viet Un ion since it dif fers from that used in the West where ev ery body who
seeks job must be em ployed. In so viet re al i ties, ev ery one who ages able-bod ied
must be em ployed, oth er wise he would be sent to prison. It would be ad vis able to
men tion Ar ti cle 12 of the 1936 So viet Con sti tu tion (about the so-called spong -
ing), which pro claimed work be ing a duty for ev ery able-bod ied cit i zen, in ac cor -
dance with the prin ci ple “He who does not work, nei ther shall he eat”. Later, in
1961, the Su preme So viet of the USSR adopted the Law (based on the above-
 men tioned Ar ti cle 12) “On strength en ing the strug gle with per sons who avoid
so cially use ful work and con duct a par a sit i cal mode of life” de riv ing “un earned”
in comes from ex ploi ta tion of land al lot ments, cars, rent ing out apart ments, etc.
So cially use ful work in so viet terms means only work un der state con trol and ap -
proval. A point should be made that in the 1980s strug gle against un earned in -
comes was ac com pa nied by “peres troika” changes, when the Law “On In di vid ual
La bour Ac tiv ity” (1986) and the Law “On Co op er a tives” (1988) were en acted.
Fi nally, in 1991, strug gle against spong ing ceased as the “Law of Em ploy ment”
was adopted, which abol ished crim i nal re spon si bil ity for spong ing and  acknow -
ledged for the first time a phenomenon of unemployment. 
Thus, so viet sys tem of pro hib i tive mea sures formed quite a spe cific at ti tude
to work and pay; be sides, heavily con trib uted to uni fi ca tion, or rather, equa li sa -
tion of liv ing stan dards among so viet peo ple. That was the main rea son why in the 
early 1990s new op por tu ni ties of fered by mar ket econ omy were ab so lutely un ex -
pected for the ma jor ity of pop u la tion, why the eco nomic ini tia tive was nipped in
the bud, only high light ing the se vere prob lem of search ing for the sources of liv -
ing. Af ter the So viet Un ion’s full em ploy ment pol icy, which pro vided low but se -
cure wages and lasted over sev eral gen er a tions, had been bro ken, mil lions of peo -
ple were dis missed from in dus trial en ter prises and re search in sti tutes1, which
had to be closed down. So, they sud denly lost their state-guar an teed jobs and ex -
pe ri enced un em ploy ment for the first time in their lives. 
There fore, all the pro cesses in socio-eco nomic sphere il lus trated by both sta tis ti -
cal and so cio log i cal data rep re sent ini tially spon ta ne ous changes in the em ploy ment
struc ture, at ti tudes to work, work mo ti va tion, as well as new trends in ca reer as pi ra -
tions to gether with the de vel op ment of mar ket con scious ness. How ever, the so-called
so viet tracks (typ i cal so viet sys tem of low wages to gether with post-so viet com pli -
cated tax sys tem and high fis cal bur den) are barely vis i ble, which re sults in in creas -
ing shadow econ omy and in for mal em ploy ment.
Con cep tual frame work. Ob vi ously, all the above ar gu ments re fer to the
well-known con cept of path de pend ence, which gen er al ises all other con cepts ap -
pro pri ate for un der stand ing and ex plain ing post-so viet so cial re al i ties. Post-so -
cial ist stud ies used to be car ried out in terms of transitology that later was re -
placed with a more ad e quate re search logics for anal y sis — “from where to where”. 
Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2 153
Work transformation within post-soviet transit: sociological peculiarities of Ukraine’s case
1 Those enterprises and research institutions belonged to various industrial branches, but
most of them related to defense industry.
The over all qual ity of a socio-eco nomic sys tem be fore un der go ing cer tain
changes turned out to be more im por tant to its fu ture de vel op ment; there fore, in
the 2000s the con cept of path de pend ence ac quired pri mary im por tance to
post-so viet stud ies. This con cept, pre vi ously used mainly by econ o mists, later
was de vel oped within in ter dis ci plin ary re search em brac ing eco nom ics, so ci ol -
ogy, cul tural stud ies and his tory [Da vid, 1985; North, 1991; Ar thur, 1994;
Pierson, 2000; Biggart, 2001; Crouch and Farrel, 2004 and oth ers]. In gen eral,
path de pend ence means that cur rent and fu ture states, ac tions or de ci sions de -
pend on the path of pre vi ous states, ac tions and de ci sions with re gard to a tem po -
ral as pect, fi nally form ing the model of in sti tu tional “stick ing” [Scott E. Page,
2006]. Thus, the pro cess of for ma tion and de vel op ment of a new state is es sen -
tially de ter mined by its ex is tence at the stage of a proto-state; fur ther more, the
most de ci sive fac tors are in sti tu tional, even tual and be hav ioural. This con cept
can be pre sented as an in sti tu tional man i fes ta tion of es tab lished pat terns of so cial 
norms and prac tices, which have been re pro duced un der new con di tions, de ter -
min ing the state of a so ci ety, po lit ico-eco nomic de vel op ment and so cial pro -
cesses. It has been found that the stron gest in flu ence is ex erted by in sti tu tional
fac tors re lated to men tal ity and val ues. Mi chael Burawoy, a real mas ter in the
area of eth nog ra phy of tran si tional so ci et ies, aptly noted that post-so viet coun -
tries had gone through a tran si tion with out trans for ma tion, in par tic u lar Rus sia,
which had ex pe ri enced an involutionary deg ra da tion in stead of the an tic i pated
neoliberal rev o lu tion ary break with the past or the neo-in sti tu tional as pi ra tion to
evo lu tion ary as cent to a fu ture cap i tal ism [Burawoy, 2000: p. 2]. Con se quently, in 
most post-so viet coun tries, po lit i cal choice of the model of so cial state was de ter -
mined not by cer tain na tion-spe cific fac tors or by the so ci ety’s de moc ra ti sa tion,
but ba si cally by pa ter nal is tic prin ci ples of the so viet so cial pol icy pro vided at all
lev els of so cial and po lit i cal hi er ar chy: the same fig ures within the party’s
nomenklatura were ap pointed to key po si tions, ac cord ing to elec tion re sults1.
There fore, even af ter Ukraine had gained in de pend ence Ukrai ni ans kept giv ing
their votes to well-known rep re sen ta tives of the old so viet cad res, who had au -
thor i tar ian hab its and pre ferred a com mand-ad min is tra tive style of man age -
ment. Thus, the so viet model of so cial pol icy to gether with so viet type of so cial
or gani sa tion and cul ture kept be ing re pro duced dur ing the whole pe riod of tran -
si tion from so cial ism to cap i tal ism, which has be come a real ob sta cle to mar ket
changes and their re pro duc tion. The fol low ing fac tors are im ped ing mar ket
trans for ma tion in post-so viet states: 1) low liv ing stan dards and low as pi ra tions
of the most pop u la tion groups dur ing the so viet pe riod; 2) pa tience as a na tional
trait to gether with a low pro test po ten tial and un de vel oped civil so ci ety; 3) pub -
lic views on so cial jus tice in terms of so cial ist ide ol ogy with dom i nance of ori en -
ta tion to wards work over mar ket ori en ta tion when en tre pre neur ial la bour is
mea sured not by num ber of work ing days but def i nitely by other, e.g., in no va tion
eco nomic cri te ria [Shabanova, 2005: p. 35]. 
Nev er the less, one of the core con cep tual ap proaches in post-so cial ist stud ies
could be a the ory of mar ket tran si tion from so cial ist sys tem. The the ory was first
in tro duced by Vic tor Nee in 1989 and later proved its va lid ity for anal y sis of so -
154 Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2
Ol'ha Ivashchenko
1 It is well known that the elections in the USSR had only one candidate on the list, giving no 
real choice to the voter. 
cial ist econ o mies un der go ing mar ket re forms, fi nally gen er al is ing the o ret i cal
ma te rial and em pir i cal find ings in the mono graph writ ten by Vic tor Nee and
Sonja Opper “Cap i tal ism from Be low” (2012). Nee orig i nally puts em pha sis on
the tran si tion from re dis tri bu tion to mar ket in state so cial ism, which shifts
sources of power and priv i lege to fa vour di rect pro duc ers rel a tive to re distri bu -
tors. In con trast to mod ern mar ket econ o mies, where re dis tri bu tion is pro vided
by wel fare state in sti tu tions, in state so cial ist so ci et ies re dis tri bu tion “con sti -
tutes the in te gra tive prin ci ple of econ omy” and is pro vided by in sti tu tions of cen -
tral plan ning [Nee, 1989: p. 663]. The ad min is tra tive model for dis tri bu tion of re -
wards, which ex isted dur ing state so cial ism, was pro longed af ter wards in some
cases of util ity of po lit i cal power for en tre pre neurs, but hi er ar chi cal forms of eco -
nomic co or di na tion re main dom i nant. The three in ter re lated the ses con sti tute
Nee’s mar ket tran si tion the ory: 1) the mar ket power the sis, ac cord ing to which less 
power — con trol over re sources — is lo cated in the redistributive econ omy and
more in mar ket-like ex changes; 2) the mar ket in cen tive the sis — redistributive
econ omy de presses in cen tive be cause ad min is tra tively set prices for la bour
(with out per for mance-re lated pay, just loy alty to the sys tem was re warded) are
lower than mar ket-de ter mined ones; 3) the mar ket op por tu nity the sis about
changes in op por tu nity struc tures con cen trated on the mar ket place, rather than
within the redistributive sec tor [Nee, 1989: p. 667]. Fol low ing Karl Polanyi’s
con cept of re dis tri bu tion and non-mar ket trade, Nee re ferred also to János
Kornai’s spec i fi ca tion of neg a tive con se quences of the par tial eco nomic re form,
bring ing out the worst as pects of cen tral plan ning with mar ket fea tures. It would
be good to note that Kornai did not re gard the So viet Un ion as an egal i tar ian
state; so cial in equal i ties ex isted in so viet so ci ety, though they were some what re -
stricted by dis trib ut ing wealth ac cord ing to the la bour con trib uted by a per son
whose sig nif i cance, more over, had to be es tab lished by rul ing party.
In the ad dress de liv ered at the con fer ence “Vi sions and Per spec tives af ter 20
Years of Tran si tion”, Kornai men tioned “the prin ci ple of meritocratic dis tri bu -
tion, where scal ing merit — in the prac tice of ex ist ing so cial ism — is, how ever, in
the party-state. This scale would al low much more in come to the hero of so cial ist
la bour than to an av er age worker, more to a dis trict party sec re tary than to a uni -
ver sity pro fes sor… Yes, there was some in equal ity, but look ing at the to tal in come 
and wealth dis tri bu tion of whole pop u la tion, what re ally char ac ter ised so ci ety
was more some kind of grey equa li sa tion, a dras tic sup pres sion of in come in equal -
ity” [Kornai, 2009: p. 384–385]. 
The ideas of these two out stand ing au thor i ties pro vide, ac cord ing to Nee, the
fol low ing new di rec tions in so cial ist stud ies: ex am in ing the dis trib u tive con se -
quences of par tial re form when “redistributors dou ble ben e fit from dis trib u tive
and mar ket op por tu ni ties”, “mod el ling en tre pre neur ship and la bour mar ket that
trans fer sur plus la bour into the sec ond econ omy” and fi nally, ana lys ing the role of 
the state in es tab lish ing the in sti tu tional frame work of a mixed econ omy [Nee,
1989: p. 679].
The “sec ond econ omy” sec tor, which ex isted in so cial ist coun tries, par tic u -
larly in the USSR, com prised all in come-gen er at ing ac tiv i ties out side the re -
distri butive (in other words, state-con trolled) econ omy: pri vate con struc tion
and re pairs, hand i crafts, pri vate tu tor ing, pri vately pro vided med i cal ser vices,
etc. In the So viet Un ion, be ing en gaged in these ac tiv i ties was quite risky as the
Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2 155
Work transformation within post-soviet transit: sociological peculiarities of Ukraine’s case
right to ex tra work and earn ings was strongly re stricted due to re dis tri bu tion
pol icy based on the ide ol ogy of so cial equa li sa tion. The con cept of “sec ond econ -
omy”, pro posed in 1977 by an Amer i can econ o mist Greg ory Grossman, re fers to
pro duc tive and ex change ac tiv i ties, which sat isfy at least one of the two con di -
tions: be ing di rectly for per sonal gain or con tra dict ing the ex ist ing leg is la tion.
Some sovietologists (F. Schnei der, H. Gramatski and oth ers) as serted that the
shadow econ omy, be ing pen e trated into all spheres of pro duc tion and con sump -
tion, had formed the phe nom e non of sec ond econ omy out side state con trol. The
sec ond econ omy, in its turn, per formed a num ber of func tions such as a source of
in for ma tion, sup ply, sta bil ity, and even in no va tion. As early as the mid-1980s,
sev eral so viet econ o mists de scribed the func tion of in for mal ac tiv ity in the con -
text of in di vid ual la bour ac tiv ity, which ac tu ally served as a pre cur sor to pri vate
en tre pre neur ship [Khavina and Superfin, 1986].
Hence, at the very be gin ning of mar ket tran si tion in post-so viet Ukraine
those who were en gaged in the sec ond econ omy legal ised their quasi-mar ket ac -
tiv i ties and be came the first en tre pre neurs, thus form ing the im age of mar ket-like 
changes. How ever, hab its and prac tices re lated to “par al lel econ omy”, which
were in her ited from so viet times and used in or der to avoid state con trol and,
later, tax bur den, still ex ist, al though be ing trans formed into con tem po rary ones. 
There fore, the next re search ap proach links to the con cept of in for mal econ -
omy, par tic u larly to in for mal em ploy ment. It should be ac cepted that the in for -
mal sec tor dif fers in size in dif fer ent coun tries and there are dif fer ent meth ods for
its mea sur ing. Eco nomic in for mal ity still needs close at ten tion of a re searcher, es -
pe cially in post-so cial ist coun tries. The con cept of in for mal em ploy ment based
on ILO def i ni tion as the most ap pro pri ate takes into con sid er ation in for mal
small-scale pro duc ers or dis trib u tors of goods and ser vices in re sponse to mar ket
de mand (on con di tion of reg u lar ity). But the big gest share of in for mal sec tor is
con sid ered to be long to the shadow econ omy.
A method for mea sur ing the shadow econ omy, used by a re nowned Aus trian
econ o mist Friedrich Schnei der, gives a gen eral idea of eco nomic informalisation
all over the world, but it is in suf fi cient for re search into the na ture of in for mal
eco nomic ac tiv ity. That is why Amer i can re search ers Mi chael Alexeev and Wil -
liam Pyle, hav ing thor oughly ana lysed all of the ex ist ing meth ods for mea sur ing
in for mal econ omy, which had been used to es ti mate the size of this sec tor in
post-so viet states, con cluded that such type of econ omy is a his tor i cal phe nom e -
non rather than in sti tu tion ally de ter mined [Alexeev and Pyle, 2001]. More over,
the phe nom e non of in for mal em ploy ment (both vol un tary and in vol un tary)
helps point out the pro cesses oc cur ring in la bour sphere in the post-so viet eco -
nomic space, thus pro vid ing solid ground for un der stand ing the over all pro cess of 
la bour mar ket for ma tion. In ad di tion, IZA’s1 lon gi tu di nal pro ject on la bour
mar kets in emerg ing and tran si tion econ o mies (in clud ing Ukraine) un der lines
the role of pre vi ous ba sis, that is to say so cial ist econ omy, in the na ture of spe cif i -
cally post-so viet in for mal em ploy ment [Lehmann and oth ers, 2012]. The au thors 
men tion the three ma jor con cep tual ap proaches to wards in for mal em ploy ment.
156 Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2
Ol'ha Ivashchenko
1 The Institute for the Study of Labour. Established in 1998 in Bonn, Germany, IZA is a
private independent economic research institute focused on the analysis of global labour
markets. 
The first is a tra di tional in ter pre ta tion of in for mal em ploy ment as an in vol un tary
en gage ment of work ers in seg mented la bour mar ket: there is a pri mary — for mal
— mar ket with “good” jobs and sec ond ary — in for mal — with “bad” jobs. The sec -
ond is a “re vi sion ist” ap proach [Maloney, 1999, 2004], ac cord ing to which work -
ers choose in for mal em ploy ment vol un tarily be cause of higher util ity of an in for -
mal job as com pared to a for mal one; be sides, the la bour mar ket is re garded as a
con tin uum of op tions that work ers have ei ther at a point in time or over the work -
ing life. The third con cep tual ap proach pro vides a more com plex vi sion of la bour
mar ket seg men ta tion with “up per tier jobs” and “free en try jobs” in the sec ond -
ary, in for mal sec tor; ac cess to the first group (as they are good jobs) is re stricted
while the sec ond group is open for any one (as most jobs in the in for mal sec tor,
which peo ple take up only in vol un tary). Surely, we have to dif fer en ti ate eco -
nomic ac tiv ity within the in for mal sec tor from in for mal ac tiv ity within the for -
mal sec tor, as well as sal a ried for mal/in for mal work ers from the self-em ployed
within these cat e go ries [Lehmann and Pignatti, 2007]. Ac cord ing to IZA’s data
on Ukrai nian la bour mar ket, sal a ried for mal work ers clearly dom i nate in the
over all em ploy ment struc ture not only qual i ta tively but also with re gard to their
at ti tudes to wards un em ploy ment and in for mal jobs, us ing them as “wait ing
stages” to en ter a for mal em ploy ment re la tion ship. So, the pat tern of work ing life, 
in her ited from so viet times, con tin ues to be wide spread in post-socialist Ukraine.
Self-em ploy ment, as a rel a tively new model of em ploy ment re la tion ship in
Ukrai nian la bour mar ket, when the same per son is both an em ployer and an em -
ployee, is not con sid ered an easy al ter na tive to for mal em ploy ment (at least, for
most post-so viet peo ple). Only those who have an abil ity and will ing ness to take
risk turn to self-em ploy ment as for mal en tre pre neurs, while the ma jor ity of
self-em ployed work ers were forced to take up this op tion. They are en gaged in
the in for mal sec tor and work just to sur vive [Ivashchenko, 2002–2012]. 
There are sev eral ap proaches to the phe nom e non of in for mal eco nomic ac tiv -
ity. Two of them, structuralist (de vel oped by Keith Hart in the 1970s) and
legalist (re flected in a no ta ble Pe ru vian econ o mist Hernando de Soto’s book
“The Other Path” pub lished in 1989), can def i nitely be re garded as ex plain ing
post-so viet re al i ties, where the main rea son for in for mal eco nomic ac tiv ity was a
search for the sources of liv ing. Un doubt edly, De Soto’s con clu sion about in for -
mal eco nomic ac tiv ity is worth a lot of at ten tion: in his opin ion, in for mal econ -
omy is a nat u ral or “nor mal” form of cap i tal ist en tre pre neur ship within bu reau -
cratic in sti tu tional struc tures and over-reg u lated mar ket econ omy, where the
sphere of le gal big busi ness is tightly con nected with state power — like a res er va -
tion where the small busi ness, hav ing no room to op er ate, is com pelled to go to a
shadow sec tor. How ever, the au thor makes an op ti mis tic as sump tion that the rise 
of the in for mal sec tor is a sign of wid en ing of the co hort of ag ile en tre pre neurs
whose only need is eco nomic de reg u la tion [De Soto, 1989].
So cio log i cal ev i dence (So cio log i cal Mon i tor ing 1994–2015, un der taken by
the In sti tute of So ci ol ogy of the Na tional Acad emy of Sci ences of Ukraine). Work,
em ploy ment guar an tees and em ploy ment it self have al ways oc cu pied the high est
po si tions in Ukrai nian cit i zens’ value hi er ar chy. As men tioned ear lier, the ep och
of full em ploy ment, when ev ery one was in sti tu tion ally tied to a cer tain work -
place, ended as soon as the USSR col lapsed, which sud denly con fronted mil lions
of peo ple both with open and hid den un em ploy ment. There fore, mass search for
Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2 157
Work transformation within post-soviet transit: sociological peculiarities of Ukraine’s case
work or just for the sources of liv ing along with dif fer ent ad ap ta tion chal lenges
has led to his toric changes in the la bour sphere. For ex am ple, in 1994 80.4% of re -
spon dents said that they had never changed their job while in 2001 that group re -
duced to 43%. The em ploy ment sit u a tion un der went changes in par al lel to the
growth of pri vate sec tor: since 1994 pub lic sec tor em ploy ment has been de -
creased more then two fold — from 51.2% to 19.6% (in 2014) while the fig ures for
pri vate sec tor have grown al most six fold over the same pe riod — from 6.1%
(1994) to 35.8% (2014). Em ploy ment rate, af ter steep fall in the early 1990s, be -
gan to rise again, reach ing 56.5% in 2000 and 59.3% (the his tor i cally high est
point) in 2008; how ever, fear of be ing un em ployed re mains high: 54.4% in 2008,
then sharply jumped to 80% in 2010, thus be com ing al most the same as it was in
the 1990s (84%), and fell to 60% in 2014. Be sides, em ploy ment in each eco nomic
sec tor changed to gether with the over all struc ture of Ukraine’s econ omy: from
30.6%1 (1990) to 15.8% (2009) in in dus try, from 17.1% (1990) to 4.4% (2009) in
ag ri cul ture, while the high est fig ure was re corded in ser vice sec tor — 62,5% in
2010. In gen eral, over a 20-year pe riod to tal em ploy ment de creased by 21%, the
num ber of em ploy ees in in dus try halved, in agrar ian sec tor re duced four fold
while ser vice and re tail sec tor grew al most two fold, em ploy ment in fi nan cial sec -
tor dou bled and in in sur ance sec tor in creased one and a half times.
For lack of proper eco nomic re forms, in par tic u lar in the area of em ploy ment
pol icy, the share of per sons who de fine them selves as un em ployed keeps ris ing:
48.1% in 2010 and 42% in 2014 as com pared to 39.3% in 1994; mainly due to the
in creas ing share of those who do not have a per ma nent job — by 10% from 2010 to
2014. More over, the prob lem of mis match be tween a per son’s ed u ca tional back -
ground and his/her cur rent job is quite re mark able: 51.6% of em ployed said that
their cur rent po si tion cor re sponded to their ed u ca tion while 30% pointed out
that there was a mis match be tween their cur rent job and ed u ca tion, 12% hes i -
tated to an swer. Get ting a job cor re spond ing to a per son’s pro fes sional qual i fi ca -
tion is even harder: only 28.2% of re spon dents said that their cur rent job matched 
their pro fes sional level while 32.3% gave a neg a tive an swer and 30% found it dif -
fi cult to an swer the ques tion. 
There is an other point that should be made: in Ukraine, as well as in other
CIS coun tries there has emerged a seg ment of the work ing poor due to the sys tem
of low wages in her ited from the USSR. There fore, teach ers, med i cal work ers, re -
search ers and uni ver sity lec tur ers need to earn ad di tion ally. Usu ally 10–12% of
re spon dents said that they had to earn “on the side”, but in 2010 the share of those 
who had some ex tra work amounted to 28.9%, form ing to gether with those who
did not have a per ma nent job a sig nif i cant seg ment of Ukraine’s in for mal econ -
omy, which equalled 56% of of fi cial GDP (F. Schnei der). The State Sta tis tics
Ser vice of Ukraine be gan to cal cu late the em ploy ment rate in the in for mal sec tor
as early as 2000, but the first data were open to pub lic in 2004. At that time, there
were 3,939,500 per sons, or 19.4% of all em ployed, who were en gaged in the in for -
mal sec tor. In 2009, their num ber in creased to 4,469,900, or 22.1% of all em -
ployed. In 2013, 23.6% of all em ployed per sons worked in the in for mal sec tor. The 
fol low ing branches of econ omy con sti tute the in for mal sec tor: ag ri cul ture (65%), 
158 Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2
Ol'ha Ivashchenko
1 % of total employment.
con struc tion (12%) and ser vices (12.5%) in clud ing re tail trade, re pairs, ho tel
and res tau rant busi ness. 
Since the mid-1990s Ukrai ni ans have been en coun ter ing the prob lem of un -
em ploy ment. At pres ent, al most 80% of them claim that it is very hard to get a job
that is suf fi ciently well-paid and cor re sponds to their pro fes sional level, 60-70%
want their job to match their pro fes sion. 
An other im por tant prob lem of Ukraine’s econ omy is la bour mi gra tion.
Ukrai nian mi grants have al ready been known all over the world. Ex perts es ti -
mate that there are 3–5 mil lion Ukrai ni ans work ing abroad and they send about
6–7 bil lion USD back home ev ery year. In 2001 (the year when the to tal sum of
money trans ferred from abroad was first cal cu lated and re corded), 5.5 bil lion
USD were sent back to Ukraine, which equalled nearly half the state bud get.
De spite the fact that for more than 20 years of tran si tion to a mar ket econ omy 
Ukrai ni ans have gained new work ex pe ri ence and there are lots of op por tu ni ties
opened to them (al though com pletely the op po site of what they would ex pect),
their in volve ment into en tre pre neur ship is still quite low (ap prox i mately the
same as it was in pre-re form Cen tral Eu rope). The growth of pri vate sec tor has
changed the over all struc ture of econ omy but there are no no tice able qual i ta tive
changes in the sphere of pri vate in di vid ual ini tia tives so far: the to tal num ber of
en tre pre neurs in Ukraine is about 2 mil lions1 against the back ground of 18 mil -
lions em ployed (2014). Only the self-em ployed are re tain ing their po si tions: ac -
cord ing to of fi cial sta tis tics, 17% of em ployed Ukrai ni ans in 2009 and 14% in
2014 iden ti fied them selves as self-em ployed (in clud ing ag ri cul tural sec tor).
There are dif fer ent rea sons for Ukrai ni ans’ ori en ta tion to wards self-em ploy ment: 
re peated eco nomic cri ses, low wages, ini tia tive to search for the sources of liv ing,
low but con sis tent “pro lif er a tion” of mar ket con scious ness, etc. 
Any way, get ting a job that is suf fi ciently well-paid and cor re sponds to a per -
son’s qual i fi ca tion is the acut est prob lem for the ma jor ity of Ukrai ni ans: 73% of
re spon dents com plain about it. 55% say that find ing any job, re gard less of pay or
re quired skills, is rather prob lem atic. Against the back ground of these up set ting
data only one in di ca tor may in spire op ti mism. This is Ukrai ni ans’ will ing ness to
start their own busi ness, which tends to grow: in 2004, 20% of re spon dents strongly
agreed with this state ment while in 2010, 2012 and 2014 their share amounted to
30%, 26% and 31% re spec tively, reach ing to gether with those who agreed 41%
(2004), 49% (2010), 45% (2012) and 51% (2014). These fig ures cer tainly point
to pos i tive out look for Ukraine’s econ omy, be ing a good proof of the on go ing de -
vel op ment of en tre pre neur ial cul ture and grow ing mar ket con scious ness.
Con clu sions. In gen eral, the post-so viet em ploy ment prac tices, by means of
dif fer ent sur vival strat e gies like in for mal em ploy ment, la bour mi gra tion, in -
volve ment in mul ti ple la bour mar kets, etc., have in ten si fied the pre dom i nance of
a core value model based on sub ser vi ent so viet men tal ity and trans formed it, due
to new mar ket op por tu ni ties, into the model com bin ing a boss and an em ployee in 
the same per son. This is what De Soto called peo ple’s cap i tal ism. 
Struc tural con di tions and con se quences of mar ket re form in Ukraine have
ac ti vated Ukrai ni ans’ ad ap ta tion ca pa bil ity needed to sur vive in a new re al ity
and raised pub lic ori en ta tions to wards profit, shadow econ omy and la bour mi -
Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2016, 2 159
Work transformation within post-soviet transit: sociological peculiarities of Ukraine’s case
1 Including all kinds of businesses.
gra tion. The lat ter are re garded as spheres, which pro vide an op por tu nity to gen -
er ate and ac cu mu late real in comes with out pay ing taxes as a way to coun ter bal -
ance an in crease in ex penses. On the con trary, the gov ern ment’s so cial pol icy has
al ways been di rected to wards in creas ing so cial ben e fits and thus low er ing a share
of earn ings in Ukrai ni ans’ in come struc ture; as a re sult, there is no suf fi cient po -
ten tial to raise la bour pro duc tiv ity in Ukraine so far. The over whelm ing ma jor ity
of Ukrai ni ans are dis sat is fied with the size of their sal a ries, con sid er ing them as a
man i fes ta tion of in jus tice. They share the same at ti tude to wards sal a ries of other
pro fes sional groups and even min is ters, who earn only three times more than av -
er age work ers while they should earn 20 times more (ISSP 2009)1. In for mal em -
ploy ment is seen by Ukrai ni ans as an ad di tional source of in come, al low ing them
to some what im prove their liv ing stan dards.
All of the above-men tioned socio-eco nomic cir cum stances have led to the
emer gence of a spe cific model of la bour mar ket: (1) seg mented la bour mar ket and
(2) mul ti ple la bour mar kets, which, in their turn, in clude for mal la bour mar ket
re lated to a per son’s main job, la bour mar ket for ad di tional jobs, in for mal (sha -
dow) la bour mar ket, la bour mar ket pro vid ing op por tu ni ties for self-em ploy -
ment, en tre pre neur ial ini tia tive, for eign la bour mar ket(s), small and me dium-
 scale busi nesses, etc. Both qual i ta tive and quan ti ta tive as pects of the la bour mar -
kets should be de scribed in sta tis tics and so ci ol ogy by in di cat ing the ma jor ac tors 
of these mar kets, con ti nu ity of their in volve ment in the mar kets, their cir cu la tion 
in and out side these la bour mar kets, pos si bil i ties of en ter ing, re-en ter ing and
aban don ing these la bour mar kets, etc., which are help ful to un der stand the pro -
cess of for ma tion of the post-so viet la bour mar ket and its na ture. 
The la bour mar kets in Ukraine do not emerge from the state hi er ar chy. Their
emer gence and growth are di rectly linked to the rise of man u fac tur ing mar kets,
but, at the same time, they play a fun da men tal role in so ci etal changes oc cur ring
in the re form ing state so cial ism. Re search into the pro cess of la bour mar ket for -
ma tion by us ing dif fer ent types of ev i dence (po lit i cal, eco nomic, socio-eco nomic
and so cial), which re fer to redistributive/mixed/hy brid/in for mal/mar ket econ -
omy, and dif fer ent em ploy ment cases is help ful to find out the em ploy ment trans -
for ma tion tracks within mar ket tran si tion from the So viet Un ion’s state so cial -
ism to post-so viet “cap i tal ism”. More over, socio-eco nomic sit u a tion at the “point 
of de par ture” should def i nitely be taken into ac count to un der stand the pro cess
of tran si tion in gen eral and try to pre dict where and when will be seen the “point
of ar rival”.
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