Wage determination and wage inequality inside a Russian firm in late transition: Evidence from personnel data - 1997 to 2002

Thomas Dohmen (), Hartmut Lehmann and Mark Schaffer ()

No 704, CERT Discussion Papers from Centre for Economic Reform and Transformation, Heriot Watt University

Abstract: We use personnel data from a Russian firm for the years 1997 to 2002 to study the determinants of wages during transition. Our findings indicate that remuneration is not predetermined by formal rules and a stable institutionalized structure of wages, but rather that local labor market conditions have a strong impact on wage setting at the firm level. In particular, we document that real wages fall substantially during a period of high inflation and worsening local labor market conditions. Relative wage decreases are most pronounced for employees who initially earned the highest rents. The process of rent extraction leads to a strong compression of real wages and real compensation at the firm.

Keywords: personnel economics; wage determination; Russia; transition (search for similar items in EconPapers)
JEL-codes: J31 P31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-lab, nep-ltv and nep-tra
Date: Written
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Related works:
Working Paper: Wage determination and wage inequality inside a Russian firm in late transition: Evidence from personnel data - 1997 to 2002 (2007)
Working Paper: Wage Determination and Wage Inequality Inside a Russian Firm in Late Transition: Evidence from Personnel Data – 1997 to 2002 (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:hwe:certdp:0704

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