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The Russian Labour Market Model: Trial by Recession

Author

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  • Gimpelson, V.

    (National Research University Higher School of Economics, Moscow, Russia
    Centre for Labour Market Studies, Moscow, Russia)

  • Kapeliushnikov, R.

    (Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow, Russia
    National Research University Higher School of Economics, Centre for Labour Market Studies, Moscow, Russia
    Centre for Labour Market Studies, Moscow, Russia)

Abstract

Non-standard way of labour market adjustment that evolved in Russia in the 1990-es was dubbed "the Russian Model" by some observers. Its main feature is domination of price adjustment to shocks over quantity adjustment. Saying that differently, this is the peculiar combination of wage flexibility and employment rigidity. Downward wage flexibility allows absorbing negative shocks, thus protecting employment. Positive shocks lead to large wage growth but add little to employment. This adjustment model is based on a peculiar mix of labour market institutions. This type of adjustment was at work during the 1990-es and 2000-s, though less distinctly during the crisis of 2008-2009. In this article we question how the Russian labour market is likely to react to the current crisis. Will we face strong contraction of jobs and consequent rise in unemployment, or will pay again by our earnings but thus saving jobs?

Suggested Citation

  • Gimpelson, V. & Kapeliushnikov, R., 2015. "The Russian Labour Market Model: Trial by Recession," Journal of the New Economic Association, New Economic Association, vol. 26(2), pages 249-254.
  • Handle: RePEc:nea:journl:y:2015:i:26:p:249-254
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    References listed on IDEAS

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    1. Khanna, Gaurav & Newhouse, David & Paci, Pierella, 2011. "Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-Income Countries," IZA Discussion Papers 5956, Institute of Labor Economics (IZA).
    2. Gimpelson, Vladimir & Kapeliushnikov, Rostislav, 2011. "Labor Market Adjustment: Is Russia Different?," IZA Discussion Papers 5588, Institute of Labor Economics (IZA).
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    Cited by:

    1. Gurvich, Evsey & Vakulenko, Elena, 2017. "Macroeconomic and structural properties of the Russian labor market: A cross-country comparison," Russian Journal of Economics, Elsevier, vol. 3(4), pages 411-424.
    2. Aleksandr Yu. KOKOVIKHIN & Tatyana A. KANSAFAROVA, 2018. "Institutional Barriers in the Regional System for Forming and Implementing Professional Competencies," Upravlenets, Ural State University of Economics, vol. 9(3), pages 76-81, June.
    3. Tommaso Agasisti & Aleksei Egorov & Daria Zinchenko & Oleg Leshukov, 2018. "Universities’ Efficiency And Regional Economic Short-Run Growth: Empirical Evidence From Russia," HSE Working papers WP BRP 203/EC/2018, National Research University Higher School of Economics.

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    More about this item

    Keywords

    unemployment; labor market; recession; Russia;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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