Wage Determination in Urban Russia: Underpayment and the Gender Differential

Economic Systems, Vol. 29, No. 3, pp. 325-343, 2005

20 Pages Posted: 5 May 2011 Last revised: 27 Jan 2015

See all articles by Gregory J. Brock

Gregory J. Brock

Georgia Southern University - Department of Economics

Constantin Ogloblin

Georgia Southern University -- Dept. of Finance and Economics

Date Written: May 2, 2011

Abstract

A stochastic frontier wage equation is employed to examine labor-market efficiency and estimate workers’ potential wages in Russia after a decade of economic reforms using a nationally representative household survey. Dynamic monopsony underpayment, defined as the differences between the highest wage a worker with given characteristics could earn and the worker's actual wage, is a significant factor lowering real wages. The estimated degree of underpayment differs significantly depending on gender and substantially exceeds the estimates for Western economies. Workers’ potential wages are elastic with respect to the local cost of living. Women's mean potential wage is only 58% of men's.

Keywords: frontier, gender, russia, transition, wage

Suggested Citation

Brock, Gregory and Ogloblin, Constantin, Wage Determination in Urban Russia: Underpayment and the Gender Differential (May 2, 2011). Economic Systems, Vol. 29, No. 3, pp. 325-343, 2005, Available at SSRN: https://ssrn.com/abstract=1829327

Gregory Brock (Contact Author)

Georgia Southern University - Department of Economics ( email )

P.O. Box 8153
Statesboro, GA 30460-8153
United States
912-478-5579 (Phone)

Constantin Ogloblin

Georgia Southern University -- Dept. of Finance and Economics ( email )

P.O. Box 8152
Statesboro, GA 30460
United States

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