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How Late to Pay? Understanding Wage Arrears in Russia

  • 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)

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.

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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 20 (2002)
Issue (Month): 3 (July)
Pages: 661-707

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Handle: RePEc:ucp:jlabec:v:20:y:2002:i:3:p:661-660
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  1. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 595-617, December.
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