Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation

Journal of Comparative Economics, 27(4), 595--617, 1999

44 Pages Posted: 17 Mar 1998 Last revised: 10 Jan 2019

See all articles by Hartmut Lehmann

Hartmut Lehmann

University of Bologna - School of Economics, Management, and Statistics; IZA Institute of Labor Economics

Jonathan Wadsworth

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); IZA Institute of Labor Economics; William Davidson Institute; Royal Holloway College University of London

Alessandro Acquisti

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: 1999

Abstract

The initial years of transition in the Russian federation have been characterised by relatively smaller falls in employment than observed in other reform-orientated countries of Eastern Europe. We show that for many Russian workers, the dominant form of labour market adjustment is instead the delayed receipt of wages. There are large regional variations in the incidence of wage arrears. Workers in the metropolitan centre are significantly less affected by delayed and incomplete wage payments than workers in the provinces. There is less evidence that individual characteristics contribute much toward the incidence of wage arrears, though unobserved heterogeneity has some role to play. Wage arrears are found across the skill distribution. As with the incidence of unemployment, however, there is evidence that the persistence of arrears is concentrated on a subset of the working population. We show that workers can only exercise the exit option of a job quit from a firm paying wages in arrears if the outside labour market is sufficiently dynamic.

JEL Classification: P52, J40

Suggested Citation

Lehmann, Hartmut F. and Wadsworth, Jonathan and Acquisti, Alessandro, Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation (1999). Journal of Comparative Economics, 27(4), 595--617, 1999, Available at SSRN: https://ssrn.com/abstract=66308

Hartmut F. Lehmann (Contact Author)

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jonathan Wadsworth

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
England

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

Royal Holloway College University of London

Senate House
Malet Street
London, TW20 0EX
United Kingdom

Alessandro Acquisti

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States
412-268-9853 (Phone)
412-268-5339 (Fax)

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