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Market and Institutional Determinants of Wage Differentiation in Russia

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  • Simon Clarke

Abstract

Using a range of official and survey data, the author evaluates the relative success of two approaches—competitive labor market theory and industrial relations theory/institutional economics—in explaining wage determination in Russia. Following a review of the analysis of wage determination by an influential team of World Bank economists, the author shows that increased wage inequality in Russia is dominated by inequality within occupational categories within local labor markets. Such inequality, he suggests, is primarily associated with inter-firm differences in wage levels, rather than barriers to labor mobility or differences in “human capital.†Such a pattern of differentiation entirely accords with the analyses of those institutional economists and industrial relations theorists who stress the role of the wage in regulating and motivating the labor force above its role in securing labor market equilibrium. The paper concludes by outlining the institutional framework of wage determination that underlies the observed results.

Suggested Citation

  • Simon Clarke, 2002. "Market and Institutional Determinants of Wage Differentiation in Russia," ILR Review, Cornell University, ILR School, vol. 55(4), pages 628-648, July.
    • Handle: RePEc:sae:ilrrev:v:55:y:2002:i:4:p:628-648
    DOI: 10.1177/001979390205500404
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    References listed on IDEAS

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    1. 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.
    2. Richard Layard & Andrea Richter, 1995. "How much unemployment is needed for restructing: the Russian experience," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(1), pages 39-58, March.
    3. L.A. Grogan, 1997. "Wage Dispersion in Russia," Tinbergen Institute Discussion Papers 97-075/3, Tinbergen Institute.
    4. Atkinson,Anthony Barnes & Micklewright,John, 1992. "Economic Transformation in Eastern Europe and the Distribution of Income," Cambridge Books, Cambridge University Press, number 9780521438827, January.
    5. Bob Arnot, 1988. "Controlling Soviet Labour," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-09231-4.
    6. Annette N. Brown, 1997. "The Economic Determinants of the Internal Migration Flows in Russia During Transition," William Davidson Institute Working Papers Series 89, William Davidson Institute at the University of Michigan.
    7. Lester C. Thurow, 1998. "Wage Dispersion: “Who Done It?”," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 21(1), pages 25-37, September.
    8. Katz, Katarina, 1997. "Gender, Wages and Discrimination in the USSR: A Study of a Russian Industrial Town," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 21(4), pages 431-452, July.
    9. Erica L. Groshen, 1991. "Sources of Intra-Industry Wage Dispersion: How Much Do Employers Matter?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(3), pages 869-884.
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    Cited by:

    1. T. Dohmen & H. Lehmann & M. E. Schaffer, 2007. "Wage determination and wage inequality inside a Russian firm in late transition: Evidence from personnel data - 1997 to 2002," Working Papers 606, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Harald Hagemann & Vadim Kufenko, 2016. "Economic, structural and socio-psychological determinants of protests in Russia during 2011–2012," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 24(1), pages 3-30, January.

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