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

Author

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  • 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
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    References listed on IDEAS

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    Citations

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    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.

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    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

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