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Table 2 in Appendix B contains a breakdown of services received by households and the nature of work that was used to supply these services: self-provisioning (SP), unpaid community exchange (UCE), informal work (IW), formal work (FORMAL). This breakdown depicts numbers of activities performed with great emphasis on possible informal activities. These numbers, however, do not represent economic value created by the activities.

According to Table 2, self-provisioning is the most widely used household strategy for completing work: 55 percent of all activities were performed by the household members themselves. Such self-provisioning is inherent in routine domestic tasks, such as cleaning (95 percent) and cooking (94 percent).

Informal work was used for 32 percent of all activities the last time that it was

conducted. It is mostly used for all repair work requiring skills, such as plumbing (55 percent) and tiling (65 percent); personal service activities, for example, hairdressing (69 percent) and tutoring (89 percent); and repair of goods, for instance, clothes making/repair/fit (62 percent) and shoes repair (86 percent). However, the results should be treated with caution when they refer to the services that may not originate in households but from organised enterprises in which the formality/informality of the work may not be known to customers. For instance, shoes repair or car repair often require organised effort with moderate start-up capital to be established and successfully run, even if this business is formally registered its cashflows may be hidden from tax authorities. According to Ukrainian legislation, private entrepreneurs (who the above mentioned businesses might be registered as) can pay a single tax each month independently of their income (if their annual revenue is less than 500 000 hryvnias and they employ less than 10 people including themselves) and are not obliged to use tills to issue receipts for the customer, but must record the costs and revenues. The customers do not know whether the supplier recorded the transaction or not and often do not ask for a formal receipt and rely on supplier’s reputation.

The most common reasons for using the supplier were his/her good reputation or recommendation and/or low price. The majority of the participants do not care whether the supplier is officially registered unless the service is expensive and requires qualification, and then official documents are needed for guarantee purposes, for example, for window installation. The indifference of consumers in relation to formality of the supplier indicates that informal work is not regarded as disreputable and dishonest activity. For example, when asked about how he wanted the task to be done if he had a choice, an entrepreneur answered:

‘I do not know how I want the tasks to be done. It makes no difference for me.

The most important is to find a good quality for a reasonable price. And this is the most difficult today’.

Some eight percent of all cases involved unpaid community exchange (UCE). The biggest part of reported unpaid community exchange accounts for computer repairs, performed in 15 out of 60 households (27 percent), and manicure, in 28 out of 115 households (24 percent). Paid community exchange is not characteristic to the locality.

As a rule, close relatives and friends are not paid for their one-off help. They may be rewarded either with a nominal gift (though in this case the work is considered as paid) or just by saying ‘thank you’ but the most common reason is ‘we always help each other’ i.e. the favours are done quid pro quo. An exception here are those who do some work for their relatives or friends on a regular basis, for instance full-time or part-time baby-sitting, housework, sewing, refurbishment or construction. Indeed, though some part of informal work was performed by close people for cash or a gift, it constitutes merely 18 percent from the total services received from close people. In this case the main reasons for choosing the supplier were quality, reliability and/or low price. Thus, paid community exchange often implies economic reasons. For instance, a woman engaged in entrepreneurship commented:

‘I am very busy lately at my work and cannot manage with all the domestic chores. Therefore my sister comes to my house several times a week to help me out. I would never let anyone I am not confident in into my house. She does everything about the house in a way I used to, as we were brought up together. I am not sure other people are as tidy as she or can cook according to our family traditions. Besides, she is in straitened circumstances and this is good money for her’.

Although the main reasons for employing a sister here are still the quality and security of her services, redistribution motives were mentioned also in the citation above. This confirms the validity of the complementary theory of the informal economy when talking about paid work performed by close people. Another participant pays her sister for the regular services too, because this activity is her sister’s both main regular job and

self-employment as a secondary activity. The main motive of the consumer in this case is to save money:

‘My sister is a manicure master. She works in salon and some clients come to her home. Earlier I visited one salon regularly and the master there was very good.

But prices are growing in that place and now I have to go to my sister’s home to make manicure. It is not as good as in my old salon but much cheaper’.

Only 5 percent of 2,684 domestic services activities were performed formally; though it should be stressed again, numbers are not representative of the values created and frequency of completion of tasks. Even the work that requires special skills and guaranteed quality, such as windows/doors installation, heaters/boilers installation, car repair, is mostly performed informally. For instance, in 54 of 95 households (57 percent) windows/doors installations were performed by informal workers, in 21 (22 percent) - by formally employed firms, in 16 (17 percent) - by household members themselves and in 4 (4 percent) - by means of unpaid community exchange. Car repairs and furniture making/repair gained the highest percentage of ‘formality’ – 33 percent and 28 percent respectively.

In order to obtain more detailed understanding of the housework done for and by the households, it is useful to analyse the breakdown of services by the household income groups (Table 4.8 below). The groups of the work forms are again divided into self provisioning, when the work is done by the household members; community exchange, when the work is done by relatives, friends and neighbours outside the household; informal work, when the favour is paid informally; and formal work, when the work is done formally by registered enterprise or self-employed. Each group is divided into sub-group, for example, unpaid community exchange is divided into services done for a reciprocal favour (‘Unpaid community exchange for a reciprocal favour’) or without any compensation (‘Unpaid community exchange for nothing’). It should be noted that in the case of ‘informal work by relatives and friends paid in-kind’,

the boundaries between unpaid community exchange and informal work is blurred, as the worker is rewarded but the transaction is not monetised. In order to determine the relationship between income and participation in different forms of work a Spearman's Rank Order correlation was run. One-way ANOVA was used to find whether the difference between groups is statistically significant.

Table 4.8 provides several interesting findings. Firstly, when coping with everyday tasks higher income households are more inclined to rely on informal work or formal work and less disposed towards self-provisioning and unpaid community exchange than lower income households.

Table 4.8. How did the households get the work completed? By income groups.

The work form Self-provisioning by male household member 11.3% 6.0% 13.0% 10.7%

Self-provisioning by female household member 46.8% 30.4% 24.3% 23.7%

Self-provisioning by both household members 7.4% 20.1% 15.5% 13.7%

Total self-provisioning 65.5% 56.4% 52.7% 48.2%

Unpaid community exchange for a reciprocal favour

3.4% 7.1% 2.0% 2.5%

Unpaid community exchange for nothing 4.4% 6.3% 3.6% 2.6%

Total unpaid community exchange 7.8% 13.4% 5.6% 5.1%

Informal work by self-employed 18.0% 20.5% 26.7% 26.3%

Informal work by businesses 4.2% 6.5% 7.9% 9.4%

Informal work by relatives and friends 0.7% 0.6% 0.8% 2.1%

Informal work by relatives and friends for a gift 0.2% 0.4% 1.1% 0.1%

Total informal work 23.0% 27.9% 36.4% 38.0%

Formal work 3.6% 2.2% 5.2% 8.7%

Total 100.0% 100.0% 100.0% 100.0%

For example, the highest income group uses paid labour in almost a half of cases (38 percent informally and 8.7 percent formally), while the lowest income group pays for the services only in a quarter of cases (23 percent informally and 3.6 percent formally).

However, as determined by one-way ANOVA, the difference in consumption levels between income groups is statistically significant only in the case of informal work and formal work consumption (F=14.189, p<0.01 and F=9.157, p<0.01 respectively). The frequency of self-provisioning and unpaid community exchange does not significantly differ between income groups (F= 1.979, p>0.05 for self-provisioning and F=2.567, p>

0.05 for unpaid community exchange). Secondly, in all income groups the majority of the services received in the form of informal work are mostly performed by the self-employed, and only from 0.2 to 2.1 percent of all cases are performed by close people.

This means that independent of income, people in Mykolayiv are not used to pay their close people for getting things done. Therefore, redistributive motives of informal activities mentioned in the literature review are of little applicability to Mykolayiv population (at least when speaking about domestic tasks). To address this issue in more detail, the breakdown of the community exchange (when the services are received from relatives and friends) is provided in Table 4.9.

Table 4.9. What part of all tasks was performed in the form of community exchange?

By income groups. Round, 2008) discussed in the literature review, the exchange of favours with relatives and friends in Ukraine is more characteristic to the lower income groups. Out of all services received 8.7 and 14.3 percent were done by close people in the lower income groups and 7.5 and 7.3 percent – in higher income groups. However there is no statistically significant association between income group and participation in

community exchange. More impressive difference can be found in the second row of Table 4.9 that shows which percentage of total community exchange is monetized. The households with income higher than 3000 hryvnias pay their close people in more than a half of the cases, while households with monthly income from 2000 to 3000 hryvnias and less than 2000 hryvnias pay rarely for the services (6.5 and 10.4 percent respectively) preferring to reward their relatives and friends with reciprocal favours or

‘just thank you’. There is statistically significant positive correlation between income and frequency of monetised community exchange (r_s= 0.14, p<0.05). However, there is no statistically significant difference between groups as determined by one-way ANOVA (F = 1.931, p>0.05). The last row of the table shows that monetized community exchange constitutes a very small part of all services received by the household not exceeding 2.2 percent even in the highest income households. Therefore, the redistributive reasons mentioned in the qualitative discussion earlier in this section are not only secondary as compared to financial motives but are also of insignificant prevalence in the locality researched. Thus, the complementary theory that views informal work as more socially rather than financially motivated can be supported only by a few cases.