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How Late to Pay? Understanding Wage Arrears in Russia

Author

Listed:
  • John S. Earle

    (Upjohn Institute for Employment Research and Central European University)

  • Klara Z. Sabirianova

    (William Davidson Institute at the University of Michigan Business School)

Abstract

We organize an empirical analysis of Russian wage arrears around hypotheses concerning incentives for firms to pay late and for workers to tolerate late payment. Nationally representative household panel data matched with employer data show that arrears are positively related to firm age, size, state ownership, and declining performance. Constrained multinomial logit estimates reveal intrafirm variation related to job tenure and small shareholdings in the firm. 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.

Suggested Citation

  • John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 661-707, July.
  • Handle: RePEc:ucp:jlabec:v:20:y:2002:i:3:p:661-660
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    References listed on IDEAS

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    More about this item

    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, Vacancies, and Immigrant Workers
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P3 - Economic Systems - - Socialist Institutions and Their Transitions

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