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Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation

  • Lehmann, Hartmut
  • Wadsworth, Jonathan
  • Acquisti, Alessandro

The initial years of transition in the Russian Federation have been characterised by relatively smaller falls in employment than in other reform-orientated countries of eastern Europe, despite the huge negative shock caused by the move from planned to market economy. Using information from two complementary household survey data sets, we show that for many Russian workers, the dominant form of labour market adjustment has instead been the delayed receipt of wages. Other forms of adjustment at the intensive margin have not been used much. Wage arrears are found across the private, state and budgetary sector in approximately equal proportions. There are large regional variations in the incidence of wage arrears. Workers in the metropolitan centre are significantly less affected by delayed and incomplete wage payments than workers in the provinces. There is less evidence that individual characteristics contribute much toward the incidence of wage arrears, though unobserved heterogeneity may have some role to play. As with the incidence of unemployment, however, there is evidence that the persistence of arrears is concentrated on a subset of the working population. We show that workers can only exercise the exit option of a job quit from a firm paying wages in arrears if the outside labour market is sufficiently dynamic.

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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 27 (1999)
Issue (Month): 4 (December)
Pages: 595-617

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Handle: RePEc:eee:jcecon:v:27:y:1999:i:4:p:595-617
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

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  1. Hartmut Lehmann & Jonathan Wadsworth, 2000. "Tenures that shook the world: worker turnover in Russia, Poland and Britain," LSE Research Online Documents on Economics 20186, London School of Economics and Political Science, LSE Library.
  2. Mark C. Foley, 1997. "Multiple Job Holding in Russia During Economic Transition," Working Papers 781, Economic Growth Center, Yale University.
  3. 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.
  4. Richard Layard & Ansgar Richter, 1995. "How Much Unemployment is Needed for Restructuring?: The Russian Experience," CEP Discussion Papers dp0238, Centre for Economic Performance, LSE.
  5. Mark C. Foley, 1997. "Labor Market Dynamics in Russia," Working Papers 780, Economic Growth Center, Yale University.
  6. Shleifer, Andrei, 1997. "Government in transition," European Economic Review, Elsevier, vol. 41(3-5), pages 385-410, April.
  7. Foley, M.C., 1997. "Multiple Job Holding in Russia During Economic Transition," Papers 781, Yale - Economic Growth Center.
  8. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti,Alessandro, 1998. "Grime And Punishment: Job Insecurity And Wage Arrears in The Russian Federation," Economics Technical Papers 986, Trinity College Dublin, Department of Economics.
  9. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Insecurity and Wage Arrears in the Russian Federation," IZA Discussion Papers 65, Institute for the Study of Labor (IZA).
  10. Foley, M.C., 1997. "Labor Market Dynamics in Russia," Papers 780, Yale - Economic Growth Center.
  11. Simon Johnson & Daniel Kaufman & Andrei Shleifer, 1997. "The Unofficial Economy in Transition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 159-240.
  12. A. Richter & M.E. Schaffer, 1996. "The Performance of De Novo Private Firms in Russian Manufacturing," CERT Discussion Papers 9610, Centre for Economic Reform and Transformation, Heriot Watt University.
  13. Paul Gregg & Jonathan Wadsworth, 1996. "Mind the Gap," CEP Discussion Papers dp0303, Centre for Economic Performance, LSE.
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