IDEAS home Printed from https://ideas.repec.org/p/diw/diwwpp/dp280.html
   My bibliography  Save this paper

Riding the Transition Roller-Coaster: Flexibility and the Inter-Industry Wage Structure in Russia

Author

Listed:
  • Ingo Geishecker
  • John P. Haisken-DeNew

Abstract

This paper examines the changes in the inter-industry wage structure experienced by Russia since 1993, as part of its transition from a plan-based economy to a more \market oriented" structure. Using two Russian household panel data sets, the RLMS and the RUSSET, we _nd that since the transformation process began, the dispersion of inter-industry wage structure has increased. Moreover, Russia exhibits large movements in wage premia, as industries respond to massively changing demand conditions. The issue of wage arrears (unpaid wages or outstanding pay), which a_ects half of all employees, plays an important role in the determination of wages. Studies, which do not account for wage arrears, overestimate the overall inter-industry wage dispersion. Despite movements towards a privatized market economy, we still _nd government ownership and Soviet network e_ects play an important role in determining the wage structure.

Suggested Citation

  • Ingo Geishecker & John P. Haisken-DeNew, 2002. "Riding the Transition Roller-Coaster: Flexibility and the Inter-Industry Wage Structure in Russia," Discussion Papers of DIW Berlin 280, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp280
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.38590.de/dp280.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kevin M. Murphy & Finis Welch, 1992. "The Structure of Wages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 285-326.
    2. John P. Haisken-DeNew & Christoph M. Schmidt, 2000. "Interindustry and Interregion Differentials: Mechanics and Interpretation," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 516-521, August.
    3. Michael P. Keane, 1993. "Individual Heterogeneity and Interindustry Wage Differentials," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 134-161.
    4. Robert Gibbons & Lawrence Katz, 1992. "Does Unmeasured Ability Explain Inter-Industry Wage Differentials?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(3), pages 515-535.
    5. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 595-617, December.
    6. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    7. Bird, Edward J. & Frick, Joachim R. & Wagner, Gert G., 1998. "The Income of Socialist Upper Classes during the Transition to Capitalism: Evidence from Longitudinal East German Data," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 211-225, June.
    8. G. Alfandari & M.E. Schaffer, 1996. ""Arrears" in the Russian Enterprise Sector," CERT Discussion Papers 9608, Centre for Economic Reform and Transformation, Heriot Watt University.
    9. Yoram Weiss & Robert M. Sauer & Menachem Gotlibovski, 2003. "Immigration, Search, and Loss of Skill," Journal of Labor Economics, University of Chicago Press, vol. 21(3), pages 557-592, July.
    10. Paul Kubicek, 1996. "Variations on a corporatist theme: Interest associations in post‐soviet Ukraine and Russia," Europe-Asia Studies, Taylor & Francis Journals, vol. 48(1), pages 27-46.
    11. Adrian Mander & David Clayton, 2000. "Update to hotdeck imputation," Stata Technical Bulletin, StataCorp LP, vol. 9(54).
    12. Newell, Andrew & Reilly, Barry, 1996. "The gender wage gap in Russia: Some empirical evidence," Labour Economics, Elsevier, vol. 3(3), pages 337-356, October.
    13. repec:lic:licosd:7999 is not listed on IDEAS
    14. Adrian Mander & David Clayton, 2000. "Hotdeck imputation," Stata Technical Bulletin, StataCorp LP, vol. 9(51).
    15. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Insecurity and Wage Arrears in the Russian Federation," IZA Discussion Papers 65, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. François Rycx & Ilan Tojerow & Daphné Valsamis, 2008. "Wage differentials across sectors in Europe: an east-west comparison," DULBEA Working Papers 08-17.RS, ULB -- Universite Libre de Bruxelles.
    2. Natalia V. Smirnova, 2003. "Re-employment Probabilities and Wage Offer Function for Russian Labor Market," William Davidson Institute Working Papers Series 547, William Davidson Institute at the University of Michigan.
    3. Natalia Smirnova, 2003. "Job Search Behavior of Unemployed in Russia," William Davidson Institute Working Papers Series 2003-629, William Davidson Institute at the University of Michigan.
    4. Alexander Muravyev, 2006. "Human Capital Externalities: Evidence from the Transition Economy of Russia," Discussion Papers of DIW Berlin 629, DIW Berlin, German Institute for Economic Research.
    5. Lukiyanova, A., 2011. "Wage Inequality in Russian Economic Transition (1991–2008): Stylized Facts and Explanations," Journal of the New Economic Association, New Economic Association, issue 12, pages 124-147.
    6. repec:zbw:bofitp:2003_013 is not listed on IDEAS
    7. Natalia Smirnova, 2003. "Job Search Behavior of Unemployed in Russia," William Davidson Institute Working Papers Series 2003-629, William Davidson Institute at the University of Michigan.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alan Carruth & Bill Collier & Andy Dickerson, 1999. "Inter-industry Wage Differences and Individual Heterogeneity: How Competitive is Wage Setting in the UK?," Studies in Economics 9914, School of Economics, University of Kent.
    2. John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 661-707, July.
    3. Shireen Kanji, 2011. "Labor Force Participation, Regional Location, and Economic Well-Being of Single Mothers in Russia," Journal of Family and Economic Issues, Springer, vol. 32(1), pages 62-72, March.
    4. de New, John & Schmidt, Christoph M., 1999. "Industry Wage Differentials Revisited: A Longitudinal Comparison of Germany and USA (1984-1996)," IZA Discussion Papers 98, Institute of Labor Economics (IZA).
    5. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, January.
    6. Robert Plasman & François Rycx & Ilan Tojerow, 2006. "Industry wage differentials, unobserved ability, and rent-sharing: evidence from matched employer-employee, 1992-2005," DULBEA Working Papers 06-14.RS, ULB -- Universite Libre de Bruxelles.
    7. Ricardo Freguglia & Naercio Menezes-Filho, 2012. "Inter-regional wage differentials with individual heterogeneity: evidence from Brazil," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(1), pages 17-34, August.
    8. Louise Grogan & Gerard J. van den Berg, 2001. "The duration of unemployment in Russia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(3), pages 549-568.
    9. World Bank, 2003. "The Russian Labor Market : Moving from Crisis to Recovery," World Bank Publications - Books, The World Bank Group, number 15007.
    10. S. Dobbelaere, 2003. "Ownership, Firm Size and Rent Sharing in a Transition Country," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/170, Ghent University, Faculty of Economics and Business Administration.
    11. Kam-Ki Tang & Yi-Ping Tseng, 2004. "Industry-specific human capital, knowledge labour, and industry wage structure in Taiwan," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 155-164.
    12. Mehta, Aashish & Sun, Wei, 2013. "Does Industry Affiliation Influence Wages? Evidence from Indonesia and the Asian Financial Crisis," World Development, Elsevier, vol. 51(C), pages 47-61.
    13. John S. Earle & Andrew Spicer & Klara Z. Sabirianova, 2003. "Community Norms and Organizational Practices: The Legitimization of Wage Arrears in Russia, 1992-1999," Upjohn Working Papers 03-97, W.E. Upjohn Institute for Employment Research.
    14. Magda, Iga & Rycx, François & Tojerow, Ilan & Valsamis, Daphné, 2008. "Wage Differentials across Sectors in Europe: An East-West Comparison," IZA Discussion Papers 3830, Institute of Labor Economics (IZA).
    15. Robert Gibbons & Lawrence F. Katz & Thomas Lemieux & Daniel Parent, 2005. "Comparative Advantage, Learning, and Sectoral Wage Determination," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 681-724, October.
    16. Philip Du Caju & François Rycx & Ilan Tojerow, 2011. "Wage Structure Effects of International Trade: Evidence from a Small Open Economy," Working Papers CEB 11-011, ULB -- Universite Libre de Bruxelles.
    17. Derek Neal & Sherwin Rosen, 1998. "Theories of the Distribution of Labor Earnings," NBER Working Papers 6378, National Bureau of Economic Research, Inc.
    18. Stefan Bender & Till von Wachter, 2006. "In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers," American Economic Review, American Economic Association, vol. 96(5), pages 1679-1705, December.
    19. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 595-617, December.
    20. Dobbelaere, Sabien, 2004. "Ownership, firm size and rent sharing in Bulgaria," Labour Economics, Elsevier, vol. 11(2), pages 165-189, April.

    More about this item

    Keywords

    Inter-Industry Wage Differentials; Transition Economies; Wage Arrears; Networking;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/diwbede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.