Wage Adjustment Policies in Russian Firms

27 Pages Posted: 10 Dec 2018

See all articles by Ksenia Rozhkova

Ksenia Rozhkova

National Research University Higher School of Economics

Sergey Roshchin

National Research University Higher School of Economics

Sergey Solntsev

National Research University Higher School of Economics

Date Written: December 10, 2018

Abstract

Wage adjustments for employees are a reaction mechanism to changing market conditions and form a significant part of pay policy. Though various attempts to explore wage levels and wage differentials have been made, wage adjustment policies remain an understudied topic. This paper analyses the determinants of wage adjustments based on data from Russian enterprises 2015–17. The analysis is based on detailed data from an employer survey which covers more than 5,000 firms in both the public and private sector. The study adopts probit models to identify the reasons which determine wage revisions, depending on internal employer characteristics and external labour market conditions.

The results are in line with previous research on the topic (Bayo-Moriones et al., 2016) and suggest that both internal and external factors influence wage adjustments. A wage adjustment is a reflection of the ability to pay meaning that revisions are often made by successful firms with high employee turnover. Institutional frameworks, especially trade union activity, affects the firm’s decision to adjust wages despite the general opinion on the insignificance of unions in Russia. This study contributes to the limited literature by analysing the determinants of wage policies depending on the firm’s characteristics. This is the first study of its kind based on extensive Russian data.

Keywords: Russia, wage adjustment, pay policy, pay settlement, trade union

JEL Classification: D22, J01, J31, J33, J51

Suggested Citation

Rozhkova, Ksenia and Roshchin, Sergey and Solntsev, Sergey, Wage Adjustment Policies in Russian Firms (December 10, 2018). Higher School of Economics Research Paper No. WP BRP 205/EC/2018. Available at SSRN: https://ssrn.com/abstract=3298848 or http://dx.doi.org/10.2139/ssrn.3298848

Ksenia Rozhkova

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Sergey Roshchin

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Sergey Solntsev (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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