IDEAS home Printed from https://ideas.repec.org/p/hol/holodi/0302.html
   My bibliography  Save this paper

Wage Arrears, Pay Gaps and the Distribution of Earnings: What can we learn from Russia?

Author

Abstract

Many countries in the developing world, those undergoing transition from planned to market systems and even those in the industrialised west, experience periods in which a substantial proportion of the workforce suffer wage arrears. We examine the implications for estimates of wage relativities and inequality when countries experience wage arrears on a substantial scale, using the Russian labour market as a test case. The increase in wage inequality in Russia during transition process far exceeds the increase in wage dispersion observed in other European countries undergoing transition. Russia also had much the largest incidence of wage arrears. Given data on wages and the incidence of wage arrears we construct counterfactual wage distributions, which give the distribution of pay in the absence of arrears. The results suggest that measures of earnings dispersion that ignore the presence of wage arrears would, in the Russian case, be some 30 per cent lower in the absence of arrears. If individuals in arrears are distributed uniformly across the underlying wage distribution, as appears to be the case in Russia, then it may be feasible to use wage information on the subset of those not in arrears and still get close to the underlying population parameters.

Suggested Citation

  • Hartmut Lehmann and Jonathan Wadsworth, 2003. "Wage Arrears, Pay Gaps and the Distribution of Earnings: What can we learn from Russia?," Royal Holloway, University of London: Discussion Papers in Economics 03/2, Department of Economics, Royal Holloway University of London, revised Dec 2003.
  • Handle: RePEc:hol:holodi:0302
    as

    Download full text from publisher

    File URL: http://www.rhul.ac.uk/economics/Research/WorkingPapers/pdf/dpe0302.pdf
    Download Restriction: no

    More about this item

    Keywords

    Wage Arrears; Earnings Inequality; Pay Gaps; Transition; Development;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • J0 - Labor and Demographic Economics - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hol:holodi:0302. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claire Blackman). General contact details of provider: http://www.rhul.ac.uk/economics/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.