Approaches to measuring the shadow price of individual wage mobility channels

Vladimir Karacharovskiy () and Elena Vakulenko
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Vladimir Karacharovskiy: HSE University, Moscow, Russian Federation

Applied Econometrics, 2021, vol. 61, 62-88

Abstract: The article is devoted to modeling the level of long term wages changes expectations of employees, depending on events in their life or in society (channels of wage mobility) which are caused the corresponding expectations. The shadow price of different wage mobility channels is calculated. Shadow price is considered as a cost for the state and society caused by social expectations of the channels profitability. Two approaches to measuring the shadow price are proposed when shadow price recognized: (a) as a societal characteristic that reflects the gap between the expectations associated with the use of certain mobility channels and the basic (minimum) level of social expectations in society or (b) as a characteristic that means the difference between individual wage expectations and the prediction of wages based on the minimum individual life chances on the labor market. We consider channels of wage mobility with internal and external locus of expectations' formation (individual changes vs. changes in the macro environment) and with the source of changes determined by individual activity or the natural course of events (intentional vs. inertial changes). We are also focusing on the wage mobility channels that reflect the social expectations of realizing the "protective" policy by the state. The calculations are based on data of mass survey conducted in May–June 2018 using national representative quota sample.

Keywords: shadow price; social mobility; social change; wage; labor compensation; rational expectations; adaptive expectations (search for similar items in EconPapers)
JEL-codes: D84 J31 J38 Z13 (search for similar items in EconPapers)
Date: 2021
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