Larin A.V.National Research University - Higher School of Economics in Nizhny Novgorod, Nizhny Novgorod, Russian Federation alarin@hse.ru
Anisimova A.S.National Research University - Higher School of Economics in Nizhny Novgorod, Nizhny Novgorod, Russian Federation asanisimova@edu.hse.ru
Importance We investigate nominal wage rigidity in Russia for the period from 2001 to 2012. The importance of wage rigidity for the financial policy of a company is determined by the fact that this concept explains the reason why companies do not reduce wages even when there are conditions demanding to do that. Objectives The novelty of the paper consists in investigating wage rigidity for the country with high inflation and weak labor unions. Methods For the empirical analysis, we use RLMS-HSE data for the panel survey of Russian households. The dependent variable (rigid wage) assumes a value of 0, if an individual gives a positive response to the question about wage decrease for the last year, and a value of 1, if the reported wage has not changed for this period. This approach to determine the dependent variable allows softening the consequences of measurement errors. To reveal factors that permit to explain the difference in wage rigidity among employees, we estimate a binary choice model. We have made a binary choice evaluation to obtain estimation results allowing us to explain the difference in wage rigidity among individuals. Results The place of residence of an employee (the difference in wage rigidity is up to 19.0%), and the industry an individual is employed in (up to 35.1%) are of the greatest influence and significance. At the same time, despite weak labor unions, the share of employees, whose wages have not been reduced by rigidity in Russia, reaches 63.1% that is much higher than in European countries and in the USA. Conclusions and Relevance The evaluation findings suggest that the wage rigidity is higher for male employees, and it increases with age, and it gets reduced with an increase in company size.
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