John S. Earle () (W.E. Upjohn Institute for Employment Research and Central European University) Klara Z. Sabirianova (William Davidson Institute, University of Michigan Business School and Ural State University)
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We organize an empirical analysis of Russian wage arrears around hypotheses concerning factors that create incentives for firms to pay late and for workers to tolerate late payment, both reinforced by a prevalent environment of overdue wages. Our analysis draws upon nationally representative household panel data matched with employer data to show substantial interfirm variation with the probability of arrears positively related to firm age, size, state ownership, and declining performance. Estimation of a constrained multinomial logit model also reveals intrafirm variation related to job tenure and small shareholdings in the firm. Workers tend to have higher arrears in rural regions with low hiring rates, concentrated labor markets, and more prevalent arrears in the past. We argue that wage arrears, unlike wage cuts, have a theoretically ambiguous effect on workers' quit behavior, and we show empirically that the effect varies negatively with the extent of the practice in the local labor market.
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Paper provided by W.E. Upjohn Institute for Employment Research in its series Staff Working Papers with number
02-77.
Length: Date of creation: Mar 2002 Date of revision: Handle: RePEc:upj:weupjo:02-77
Note: A revised version of this paper appears in the Journal of Labor Economics, Vol. 20, No. 3 (July 2002). See http://ideas.repec.org/a/ucp/jlabec/v20y2002i3p661-660.html. Please cite this revised version. Contact details of provider: Postal: 300 S. Westnedge Ave. Kalamazoo, MI 49007 USA Phone: 1-616-343-5541 Fax: 1-616-343-7310 Web page: http://www.upjohninstitute.org
Find related papers by JEL classification: J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods J4 - Labor and Demographic Economics - - Particular Labor Markets J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development P3 - Economic Systems - - Socialist Institutions and Their Transitions
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