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Compensating Wage Differentials Across Russian Regions

In: Geographical Labor Market Imbalances

Author

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  • Aleksey Oshchepkov

    (Higher School of Economics)

Abstract

In this chapter, we provide evidence on compensating differentials in the labor market from the largest transition economy, Russia. Using the NOBUS micro-data and a methodology based on the estimation of the wage equation augmented by aggregate regional characteristics, we show that wage differentials across Russian regions have a compensative nature. Russian workers receive wage compensations for living in regions with a higher price level and worse nonpecuniary characteristics, such as a relatively low life expectancy, a high level of air pollution, poor medical services, a colder climate, and a higher unemployment level. These compensations are not associated with the existing government system of compensating wage coefficients. After adjusting for regional amenities and disamenities, regional wages become positively correlated with interregional migration flows. According to our estimates, wage compensations along with differences in employment composition are able to account for about three-fourths of the observed variation in wages across Russian regions.

Suggested Citation

  • Aleksey Oshchepkov, 2015. "Compensating Wage Differentials Across Russian Regions," AIEL Series in Labour Economics, in: Chiara Mussida & Francesco Pastore (ed.), Geographical Labor Market Imbalances, edition 127, chapter 0, pages 65-105, Springer.
    • Handle: RePEc:spr:aiechp:978-3-642-55203-8_4
    DOI: 10.1007/978-3-642-55203-8_4
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    Cited by:

    1. Giltman, M. & Pit, V. & Batyreva, M. & Sumik, E., 2020. "Which cities do we like to live in? Empirical analysis of employees' attitude to cities," Journal of the New Economic Association, New Economic Association, vol. 45(1), pages 111-130.
    2. Marina Malkina, 2019. "Spatial wage inequality and its sectoral determinants: the case of modern Russia," Oeconomia Copernicana, Institute of Economic Research, vol. 10(1), pages 69-87, March.
    3. Ekaterina Melianova & Suhas Parandekar & Artem Volgin, 2020. "Returns to Education in the Russian Federation," World Bank Publications - Reports 34454, The World Bank Group.
    4. Giltman, M., 2017. "Employment in the North of Russia: Microdata Analysis," Journal of the New Economic Association, New Economic Association, vol. 35(3), pages 103-124.
    5. E. V. Antonov & N. K. Kurichev & A. I. Treivish, 2022. "Shrinking Urban System of the Largest Country: Research Progress and Unsolved Issues," Regional Research of Russia, Springer, vol. 12(1), pages 20-35, March.
    6. Hartmut Lehmann & Aleksey Oshchepkov & Maria Giulia Silvagni, 2020. "Regional Convergence In Russia: Estimating A Neoclassical Growth Model," HSE Working papers WP BRP 232/EC/2020, National Research University Higher School of Economics.

    More about this item

    Keywords

    Compensating differentials; Regional wages; Migration; Russia;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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