The Russian Labour Market Model: Trial by Recession

Vladimir Gimpelson and Rostislav Kapeliushnikov ()

Journal of the New Economic Association, 2015, vol. 26, issue 2, 249-254

Abstract: Non-standard way of labour market adjustment that evolved in Russia in the 1990-es was dubbed "the Russian Model" by some observers. Its main feature is domination of price adjustment to shocks over quantity adjustment. Saying that differently, this is the peculiar combination of wage flexibility and employment rigidity. Downward wage flexibility allows absorbing negative shocks, thus protecting employment. Positive shocks lead to large wage growth but add little to employment. This adjustment model is based on a peculiar mix of labour market institutions. This type of adjustment was at work during the 1990-es and 2000-s, though less distinctly during the crisis of 2008-2009. In this article we question how the Russian labour market is likely to react to the current crisis. Will we face strong contraction of jobs and consequent rise in unemployment, or will pay again by our earnings but thus saving jobs?

Keywords: unemployment; labor market; recession; Russia (search for similar items in EconPapers)
JEL-codes: E32 J01 J64 J68 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (12)

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