Are Public Sector Workers Underpaid in Russia? Estimating the Public-Private Wage Gap

The paper starts with discussing institutional framework for public sector wage setting in Russia. Given that individual choice of the sector is endogenous to wages, the authors recommend alternative econometric techniques for the public-private wage gap estimation. Applying switching regression that allows correcting for non-random sector selection, the paper provides wage gap estimates for various demographic, occupational, and territorial population subgroups. As it is shown, there is significant cross-group variation in the wage gap. The paper concludes that to eliminate the negative gap wages in the public sector should be linked to the private sector wages at the regional level.public sector

Labour Turnover in Russia: Evidence from the Administrative Reporting of Enterprises in Four Regions

Early in the 1990s, the introduction of economic reforms in Russia created expectations of a substantial reallocation of labour; "old" jobs in the state and former-state sector were to be shed and "new" jobs created in new private firms. Although the labour market experienced relatively heavy flows, they did not occur in the expected pattern. Most of the separations were quits rather than lay-offs and former-state enterprises continued to hire at relatively high rates. This paper takes a fresh look at the developments in labour turnover and the relationship between the components of labour turnover and various enterprise characteristics. National-level aggregate statistics are used to gain insights concerning the scale and structure of labour turnover in medium and large enterprises. A more detailed examination is then made of the components of labour turnover and their relationship to selected enterprise characteristics using microdata from administrative reporting in four Russian regions.Labour Turnovers, Hirings, Separations, Employment, Microdata, Russian Regions

Labor Market Adjustment: Is Russia Different?

The paper discusses how the Russian labor market has been evolving over two decades of the transition. It starts with tracing key labor market indicators such as employment, unemployment, labor force participation, working hours, and real wages. Their dynamics indicate that the labor market tends to operate in a non-conventional fashion and far from the patterns expected initially. The authors argue that the current Russian labor market represents a peculiar model that is different from what is observed in the rest of Europe outside of the CIS. Having established this, they look at the institutional foundations that make this unconventional performance possible and proceed with discussing political economy and welfare implications. The findings are compared with the experience of other post-socialist countries.employment, unemployment, wages, labor market institutions, Russia

Employment Protection Legislation in Russia: Regional Enforcement and Labour Market Outcomes

Since formal laws can be observed or ignored to varying degrees, the actual enforcement regime shapes incentives and constraints. Most of the studies exploring EPL effects on labour market performance implicitly assume that EPL compliance is near to complete and therefore all firms bear full adjustment costs incurred by the regulations. This seems to be a very strong assumption for any country but it sounds especially strong and hardly plausible for developing and transition economies. But if compliance and enforcement varies widely across regions/cities or segments of firms, then this variation is likely to cause variation in performance. This paper looks at Russia in particular. The main idea of this paper is to analize cross-regional and inter-temporal variation in EPL enforcement and to explore empirically whether it is translated into regional labour market outcomes. The paper employs unique data set based on the State Labour Inspectorate data and the Supreme Court statistics on labour disputes.employment protection regulations, enforcement, employment, unemployment, regional labor markets, Russia

Stuck Between Surplus and Shortage: Demand for Skills in the Russian Industry

In order to remain competitive, firms need to keep the quantity and composition of jobs close to the optimal for their given output. Since the beginning of the transition period, Russian industrial firms have been widely reporting that the quantity and composition of hired labor is far from being close to optimal. This paper discusses what kinds of firms in the Russian manufacturing sector are not able to optimize their employment and why. Do they suffer from a labor shortage induced by rapid growth, or are they still struggling with employment overhang? What are the occupations and skills in which there is a supposed surplus or shortage? What factors affect the probability that a firm will report non-optimal employment and be unable to solve this difficulty? Where is the labor excess/shortage concentrated and what makes it persistent? Finally, we discuss the costs of non-optimal employment. The analysis presented in this article is based on the data from a large-scale survey of Russian manufacturing firms.labour shortage, skills, training, transition economies, Russia

Does more unemployment cause more fear of unemployment?

Using the Russian Longitudinal Monitoring Survey data, the paper examines Russian workers' fear of unemployment under different economic and labor market conditions during the last 15 years. We employ two alternative measures for this fear. The first one looks at the workers' fear of losing their current jobs, while the second deals with the fear of not finding relevant re-employment in case of displacement. In order to get the best possible measurement of unemployment for those local and social environments where our respondents live and work, we design unemployment rates for narrowly defined regional and demographic (peer) groups. Estimating ordered probit models for both fear measures, and controlling for various worker and job characteristics, we do not find significant causal effects of unemployment on these fears in most of our specifications. These results are robust to exclusion of potentially endogenous variables; they hold for different periods, subsamples, and levels of job security. Moreover, our simulations show that even a large increase in the unemployment rate has little impact on conditional probabilities of expressing a strong or weak fear of unemployment. These results suggest that the high level and persistence of fear of unemployment in Russia may be caused by non-economic factors

Informality and Mobility: Evidence from Russian Panel Data

Informality is a defining characteristic of labor markets in developing and transition countries. This paper analyzes patterns of mobility across different forms of formal and informal employment in Russia. Using the RLMS household panel we estimate a dynamic multinomial logit model with individual heterogeneity and correct for the initial conditions problem. Simulations show that structural state dependence is weak and that transition rates from informal to formal employment are not lower than from other origin states. These results lend support to the integrated view of the labor market

Polarization or Upgrading? Evolution of Employment in Transitionary Russia

This paper discusses the structural change in the Russian employment and explores whether the evolution of employment over 2000-2012 followed the scenario of progressive upgrading in job quality or brought about the polarization of jobs in terms of their quality. Jobs are defined here as occupation-industry cells and their quality is measured through relative earnings and education levels. Using detailed micro-data from a few complementary large scale surveys, we rank all jobs according to the earnings and educational criteria and divide these distributions into 5 quintiles. At the next stage, we explore dynamic changes in job quality and socio-demographic characteristics of workers in different quintiles. The paper rejects the polarization scenario and confirms the upgrading hypothesis

Between Light and Shadow: Informality in the Russian Labour Market

Economic growth in Russia in the first decade of this century almost doubled the country's GDP but was accompanied by substantial reallocation of labor to the unregulated sector while formal employment was on gradual decline. The paper overviews evolution of the Russian labour market during the period of 2000-10 and discusses most general implications of informality to employment and earnings as well as the associated political economy challenges and consequences

Are public sector workers underpaid in Russia? Estimating the public-private wage gap

The paper starts with discussing institutional framework for public sector wage setting in Russia. Given that individual choice of the sector is endogenous to wages, the authors recommend alternative econometric techniques for the public-private wage gap estimation. Applying switching regression that allows correcting for non-random sector selection, the paper provides wage gap estimates for various demographic, occupational, and territorial population subgroups. As it is shown, there is significant cross-group variation in the wage gap. The paper concludes that to eliminate the negative gap wages in the public sector should be linked to the private sector wages at the regional level