Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/diw/diwwpp/dp771.html
   My bibliography  Save this paper

Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data - 1997 to 2002

Author

Listed:
  • Thomas Dohmen
  • Hartmut Lehmann
  • Mark E. Schaffer
Abstract
We use a rich personnel data set from a Russian firm for the years 1997 to 2002 to analyze how the financial crisis in 1998 and the resulting change in external labor market conditions affect the wages and the welfare of workers inside a firm. We provide evidence that large shocks to external conditions affect the firm's personnel policies, and show that the burden of the shock is not evenly spread across the workforce. The firm takes advantage of a high-inflationary environment and of a fall in workers' outside options after the financial crisis and cuts real wages. Earnings are curbed most for those who earned the highest rents, resulting in a strong compression of real wages. The fact that real wages and real compensation levels never recovered to pre-crisis levels even though the firm's financial situation was better in 2002 than before the crisis and the differential treatment of employee groups within the firm can be taken as evidence that market forces strongly influence the wage policies of our firm.

Suggested Citation

  • Thomas Dohmen & Hartmut Lehmann & Mark E. Schaffer, 2008. "Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data - 1997 to 2002," Discussion Papers of DIW Berlin 771, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp771
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.79809.de/dp771.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Thomas Dohmen & Hartmut F. Lehmann & Mark E. Schaffer, 2014. "Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data, 1997 to 2002," ILR Review, Cornell University, ILR School, vol. 67(2), pages 504-531, April.
    2. John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 661-707, July.
    3. David Card & Dean Hyslop, 1997. "Does Inflation "Grease the Wheels of the Labor Market"?," NBER Chapters, in: Reducing Inflation: Motivation and Strategy, pages 71-122, National Bureau of Economic Research, Inc.
    4. Fehr, Ernst & Goette, Lorenz, 2005. "Robustness and real consequences of nominal wage rigidity," Journal of Monetary Economics, Elsevier, vol. 52(4), pages 779-804, May.
    5. Dohmen, Thomas J. & Pfann, Gerard A., 2004. "Worker separations in a nonstationary corporate environment," European Economic Review, Elsevier, vol. 48(3), pages 645-663, June.
    6. Christina D. Romer & David H. Romer, 1997. "Reducing Inflation: Motivation and Strategy," NBER Books, National Bureau of Economic Research, Inc, number rome97-1.
    7. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 595-617, December.
    8. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    9. Dohmen, Thomas J., 2004. "Performance, seniority, and wages: formal salary systems and individual earnings profiles," Labour Economics, Elsevier, vol. 11(6), pages 741-763, December.
    10. Christopher A. Pissarides, 1994. "Search Unemployment with On-the-job Search," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 457-475.
    11. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 921-955.
    12. Stefan Bender & Till von Wachter, 2006. "In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers," American Economic Review, American Economic Association, vol. 96(5), pages 1679-1705, December.
    13. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    14. Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-125, March.
    15. Thomas Bauer & Holger Bonin & Lorenz Goette & Uwe Sunde, 2007. "Real and Nominal Wage Rigidities and the Rate of Inflation: Evidence from West German Micro Data," Economic Journal, Royal Economic Society, vol. 117(524), pages 508-529, November.
    16. Joseph G. Altonji & Paul J. Devereux, 1999. "The Extent and Consequences of Downward Nominal Wage Rigidity," NBER Working Papers 7236, National Bureau of Economic Research, Inc.
    17. repec:bla:econom:v:63:y:1996:i:250:p:s29-62 is not listed on IDEAS
    18. Daniel S. Hamermesh & Gerard A. Pfann, 1996. "Adjustment Costs in Factor Demand," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1264-1292, September.
    19. Lazear, Edward P, 1999. "Personnel Economics: Past Lessons and Future Directions: Presidential Address to the Society of Labor Economists, San Francisco, May 1, 1998," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 199-236, April.
    20. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    21. repec:lic:licosd:7999 is not listed on IDEAS
    22. Lazear, Edward P. & Oyer, Paul, 2004. "Internal and external labor markets: a personnel economics approach," Labour Economics, Elsevier, vol. 11(5), pages 527-554, October.
    23. Schlicht, Ekkehart, 1978. "Labour Turnover, Wage Structure, and Natural Unemployment," Munich Reprints in Economics 1255, University of Munich, Department of Economics.
    24. Konings, Jozef & Lehmann, Hartmut, 2002. "Marshall and Labor Demand in Russia: Going Back to Basics," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 134-159, March.
    25. Padma Desai, 2000. "Why Did the Ruble Collapse in August 1998?," American Economic Review, American Economic Association, vol. 90(2), pages 48-52, May.
    26. Granger, C. W. J. & Newbold, Paul, 1986. "Forecasting Economic Time Series," Elsevier Monographs, Elsevier, edition 2, number 9780122951831 edited by Shell, Karl.
    27. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter.
    28. Peter R. Fallon & Robert E. B. Lucas, 2002. "The Impact of Financial Crises on Labor Markets, Household Incomes, and Poverty: A Review of Evidence," The World Bank Research Observer, World Bank, vol. 17(1), pages 21-45.
    29. Thomas Dohmen & Hartmut Lehmann & Anzelika Zaiceva, 2008. "The Gender Earnings Gap inside a Russian Firm: First Evidence from Personnel Data - 1997 to 2002 ; Updated Version," ESCIRRU Working Papers 6, DIW Berlin, German Institute for Economic Research.
    30. Gibbons, Robert & Waldman, Michael, 1999. "Careers in organizations: Theory and evidence," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 36, pages 2373-2437, Elsevier.
    31. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Insecurity and Wage Arrears in the Russian Federation," IZA Discussion Papers 65, Institute of Labor Economics (IZA).
    32. Daniel S. Hamermesh, 1993. "Labor Demand and the Source of Adjustment Costs," NBER Working Papers 4394, National Bureau of Economic Research, Inc.
    33. Alejandro Lopez-Feldman, 2005. "DESCOGINI: Stata module to perform Gini decomposition by income source," Statistical Software Components S456001, Boston College Department of Economics, revised 22 Sep 2008.
    34. Homi Kharas & Brian Pinto & Sergei Ulatov, 2001. "An Analysis of Russia's 1998 Meltdown: Fundamentals and Market Signals," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 1-68.
    35. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    36. Elena Kazakova, 2007. "Wages in a growing Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(2), pages 365-392, April.
    37. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    38. Hartmut Lehmann & Alexander Muravyev & Tiziano Razzolini & Anzelika Zaiceva, 2011. "The Wage and Non-wage Costs of Displacement: Evidence from Russia," Center for Economic Research (RECent) 060, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    39. Edward P. Lazear, 1999. "Personnel Economics: Past Lessons and Future Directions," NBER Working Papers 6957, National Bureau of Economic Research, Inc.
    40. Abbigail J. Chiodo & Michael T. Owyang, 2002. "A case study of a currency crisis: the Russian default of 1998," Review, Federal Reserve Bank of St. Louis, vol. 84(Nov), pages 7-18.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Horie, Norio & Iwasaki, Ichiro & 岩﨑, 一郎, 2022. "Returns to Education in European Emerging Markets: A Meta-Analytic Review," RRC Working Paper Series 95, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    2. Joanna Tyrowicz & Lucas van der Velde, 2017. "When the opportunity knocks: large structural shocks and gender wage gaps," GRAPE Working Papers 2, GRAPE Group for Research in Applied Economics.
    3. Tamar Khitarishvili, 2018. "Gender Pay Gaps in the Former Soviet Union: A Review of the Evidence," Economics Working Paper Archive wp_899, Levy Economics Institute.
    4. Christian Pfeifer & Tatjana Sohr, 2009. "Analysing the Gender Wage Gap (GWG) Using Personnel Records," LABOUR, CEIS, vol. 23(2), pages 257-282, June.
    5. Moritz Drechsel-Grau & Felix Holub, 2020. "Gender Gaps and the Role of Bosses," CRC TR 224 Discussion Paper Series crctr224_2020_237, University of Bonn and University of Mannheim, Germany.
    6. Stanislava Kontsevaya & Jindřich Špička & Irina Kharcheva & Irina Makunina & Raisa Kostina, 2018. "Comparison Analysis and Control Procedures of Labor Workforce Efficiency of Milk Processors in Visegrad Group and Russia," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(1), pages 263-272.
    7. Thomas Dohmen & Hartmut F. Lehmann & Mark E. Schaffer, 2014. "Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data, 1997 to 2002," ILR Review, Cornell University, ILR School, vol. 67(2), pages 504-531, April.
    8. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    9. Thomas Dohmen & Hartmut Lehmann & Anzelika Zaiceva, 2008. "The Gender Earnings Gap inside a Russian Firm: First Evidence from Personnel Data - 1997 to 2002 ; Updated Version," ESCIRRU Working Papers 6, DIW Berlin, German Institute for Economic Research.
    10. Christian Grund & Tanja Hofmann, 2019. "The dispersion of bonus payments within and between firms," Journal of Business Economics, Springer, vol. 89(4), pages 417-445, June.
    11. Zheng Fang & Chris Sakellariou, 2015. "Glass Ceilings versus Sticky Floors: Evidence from Southeast Asia and an International Update," Asian Economic Journal, East Asian Economic Association, vol. 29(3), pages 215-242, September.
    12. Colella, Fabrizio, 2014. "Women's Part-Time - Full-Time Wage Differentials in Europe: an Endogenous Switching Model," MPRA Paper 55287, University Library of Munich, Germany.
    13. Gurvich, E. & Vakulenko, E., 2018. "Studies of Russian Labor Market and Economic Policy," Journal of the New Economic Association, New Economic Association, vol. 37(1), pages 203-212.
    14. Joanna Tyrowicz & Lucas Augusto van der Velde, 2021. "When Opportunity Knocks: Confronting Theory and Empirics About Dynamics of Gender Wage Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(3), pages 837-864, June.
    15. Lokshin, Michael & Gimpelson, Vladimir & Oshchepkov, Aleksey, 2012. "Explaining the Dynamics in Perceptions of Job Insecurity in Russia," IZA Discussion Papers 6422, Institute of Labor Economics (IZA).
    16. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    17. Juho Jokinen & Jaakko Pehkonen, 2017. "Promotions and Earnings – Gender or Merit? Evidence from Longitudinal Personnel Data," Journal of Labor Research, Springer, vol. 38(3), pages 306-334, September.
    18. Carolina Castagnetti & Luisa Rosti, 2012. "Unfair tournaments: gender stereotyping and wage discrimination among Italian graduates," DEM Working Papers Series 010, University of Pavia, Department of Economics and Management.
    19. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    20. Norberto Pignatti, 2012. "Gender wage gap dynamics in a changing Ukraine," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-44, December.
    21. Pfeifer, Christian & Sohr, Tatjana, 2008. "Analysing the Gender Wage Gap Using Personnel Records of a Large German Company," IZA Discussion Papers 3533, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    2. Thomas Dohmen & Hartmut Lehmann & Anzelika Zaiceva, 2008. "The Gender Earnings Gap inside a Russian Firm: First Evidence from Personnel Data - 1997 to 2002 ; Updated Version," ESCIRRU Working Papers 6, DIW Berlin, German Institute for Economic Research.
    3. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    4. Dohmen, Thomas & Lehmann, Hartmut & Zaiceva, Anzelika, 2008. "The gender earnings gap inside a Russian firm : first evidence from personnel data - 1997 to 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 157-179.
    5. Cornelissen, Thomas & Hübler, Olaf, 2005. "Downward Wage Rigidity and Labour Mobility," IZA Discussion Papers 1523, Institute of Labor Economics (IZA).
    6. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    7. Tamar Khitarishvili, 2018. "Gender Pay Gaps in the Former Soviet Union: A Review of the Evidence," Economics Working Paper Archive wp_899, Levy Economics Institute.
    8. Horie, Norio & Iwasaki, Ichiro & 岩﨑, 一郎, 2022. "Returns to Education in European Emerging Markets: A Meta-Analytic Review," RRC Working Paper Series 95, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    9. Grund, Christian & Walter, Tanja, 2013. "Management Compensation and the Economic Crisis: Longitudinal Evidence from the German Chemical Sector," IZA Discussion Papers 7435, Institute of Labor Economics (IZA).
    10. Joanna Tyrowicz & Lucas van der Velde, 2017. "When the opportunity knocks: large structural shocks and gender wage gaps," GRAPE Working Papers 2, GRAPE Group for Research in Applied Economics.
    11. Carolina Castagnetti & Luisa Rosti, 2012. "Unfair tournaments: gender stereotyping and wage discrimination among Italian graduates," DEM Working Papers Series 010, University of Pavia, Department of Economics and Management.
    12. Patrick A. Puhani, 2000. "On the Identification of Relative Wage Rigidity Dynamics," William Davidson Institute Working Papers Series 343, William Davidson Institute at the University of Michigan.
    13. Steinar Holden & Fredrik Wulfsberg, 2004. "Downward Nominal Wage Rigidity in Europe," Working Paper 2004/5, Norges Bank.
    14. Dany Brouillette & Olena Kostyshyna & Natalia Kyui, 2018. "Downward nominal wage rigidity in Canada: Evidence from micro-level data," Canadian Journal of Economics, Canadian Economics Association, vol. 51(3), pages 968-1002, August.
    15. Lokshin, Michael & Gimpelson, Vladimir & Oshchepkov, Aleksey, 2012. "Explaining the Dynamics in Perceptions of Job Insecurity in Russia," IZA Discussion Papers 6422, Institute of Labor Economics (IZA).
    16. Patrick J. Coe, 2018. "Downward nominal wage rigidity: Evidence from Canada 19011950," Canadian Journal of Economics, Canadian Economics Association, vol. 51(3), pages 946-967, August.
    17. Joanna Tyrowicz & Lucas Augusto van der Velde, 2021. "When Opportunity Knocks: Confronting Theory and Empirics About Dynamics of Gender Wage Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(3), pages 837-864, June.
    18. Lehmann, Hartmut & Pignatti, Norberto & Wadsworth, Jonathan, 2006. "The incidence and cost of job loss in the Ukrainian labor market," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 248-271, June.
    19. Jörn‐Steffen Pischke, 2018. "Wage Flexibility and Employment Fluctuations: Evidence from the Housing Sector," Economica, London School of Economics and Political Science, vol. 85(339), pages 407-427, July.
    20. Moritz Drechsel-Grau & Felix Holub, 2020. "Gender Gaps and the Role of Bosses," CRC TR 224 Discussion Paper Series crctr224_2020_237, University of Bonn and University of Mannheim, Germany.

    More about this item

    Keywords

    Internal labor markets; wage policies of a firm; personnel data; Russia;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp771. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/diwbede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.