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Wage-setting Mechanisms in the Russian Industry

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  • R. Kapelyushnikov.

Abstract

The paper examines a specific model of wage-setting evolved in Russia under transition. Using new survey data author reveals paradoxical characteristics of wage-setting mechanisms at Russian industrial enterprises: very high union and collective agreement coverage; nearly unilateral control of managers over wage determination; close correlation between earnings and enterprises' performance; voluntary utilization of wage standards established by the state. The special section explores effects of fulfilling a new provision stipulated for by the recently adopted Labor Code to raise minimum wage to the subsistence minimum level. The author concludes that wage-setting in the Russian labor market is at odds with a textbook competitive model and poorly fits into many other sophisticated theoretical schemes (such as labor-managed firms, bargaining models etc.).

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Bibliographic Info

Article provided by N.P. Redaktsiya zhurnala "Voprosy Economiki" in its journal Voprosy Economiki.

Volume (Year): 4 (2004)
Issue (Month): ()
Pages:

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Handle: RePEc:nos:voprec:2004-4-4

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Web page: http://www.vopreco.ru/eng/year.html

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  1. Shakhnovich Ruvim & Yudashkina Galina, 2001. "Wage-Setting and Employment Behavior of Enterprises during the Period of Economic Transition," EERC Working Paper Series 01-04e, EERC Research Network, Russia and CIS.
  2. Simon Clarke, 2002. "Market and institutional determinants of wage differentiation in Russia," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 55(4), pages 628-648, July.
  3. Peter J. Luke & Mark E. Schaffer, 1999. "Wage Determination in Russia: An Econometric Investigation," CERT Discussion Papers 9908, Centre for Economic Reform and Transformation, Heriot Watt University.
  4. Commander, Simon & Liberman, Leonid & Yemtsov, Ruslan, 1993. "Wage and employment decisions in the Russian economy : an analysis of developments in 1992," Policy Research Working Paper Series 1205, The World Bank.
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