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

Mark Schaffer (), Hartmut Lehmann () and Thomas Dohmen

No 6845, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 labour 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.

Keywords: Firm-level wage setting; Internal labour markets; Personnel data; Russia (search for similar items in EconPapers)
JEL-codes: J23 J31 P23 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-lab
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://cepr.org/publications/DP6845 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data, 1997 to 2002 (2014)
Working Paper: Wage policies of a Russian firm and the financial crisis of 1998: Evidence from personnel data 1997 to 2002 (2013)
Working Paper: Wage policies of a Russian firm and the financial crisis of 1998: Evidence from personnel data - 1997-2002 (2013)
Working Paper: Wage policies of a Russian firm and the financial crisis of 1998: Evidence from personnel data 1997 to 2002 (2008)
Working Paper: Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data - 1997 to 2002 (2008)
Working Paper: Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data - 1997 to 2002 (2008)
Working Paper: Wage policies of a Russian firm and the financial crisis of 1998: Evidence from personnel data - 1997 to 2002 (2008)
Working Paper: Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data – 1997 to 2002 (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:6845

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6845

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().