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Spatial aspects of wage curve estimation in Russia

Author

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  • Demidova, O.

    (National Research University "Higher School of Economics", Moscow, Russia)

  • Timofeeva, E.

    (National Research University "Higher School of Economics", Moscow, Russia)

Abstract

The wage curve is traditionally defined as the negative relationship between wages and unemployment rates (taking into account various control variables). It was empirically shown that the wage curve exists in some countries, including Russia. However, usually in such studies with data for the Russian regions, the mutual influence of Russian regions is not taken into account. This could create the problem of omitted variable bias. In this paper, we took into account the corresponding impact using spatial-econometric models and gave a detailed interpretation of the results. The estimate of the parameter reflecting the effect of unemployment on wages in the model without spatial effects is almost twice the corresponding estimate in the models where these effects are taken into account. According to panel data for 2005-2018 for 81 regions we estimated the partial marginal effects of changes in unemployment in one region on wages in the other regions. Similar calculations were made for the other variables. Using partial marginal effects, we found for each region: 1) the regions most affected by this one, 2) the regions, changes in which will most likely affect the selected one. This is important, for example, for assessing consequences of government programs etc.

Suggested Citation

  • Demidova, O. & Timofeeva, E., 2021. "Spatial aspects of wage curve estimation in Russia," Journal of the New Economic Association, New Economic Association, vol. 51(3), pages 69-101.
    • Handle: RePEc:nea:journl:y:2021:i:51:p:69-101
    DOI: 10.31737/2221-2264-2021-51-3-4
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    References listed on IDEAS

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    Cited by:

    1. Demidova, Olga, 2021. "Methods of spatial econometrics and evaluation of government programs effectiveness," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 64, pages 107-134.
    2. Venera Timiryanova & Dina Krasnoselskaya & Natalia Kuzminykh, 2022. "Applying the Multilevel Approach in Estimation of Income Population Differences," Stats, MDPI, vol. 6(1), pages 1-32, December.

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    More about this item

    Keywords

    wage curve; unemployment; spatial models; marginal effects;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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