Sergei A. Afontsev
Labor Stimulation versus Employment Stimulation in Russia: Political Economy Perspective,
in: Ekonomicheskaja istorija. Ezhegodnik (Economic Hystory. Yearbook). 2001, Moscow: ROSSPEN, 2002, p.526-550.
The paper considers inter-regional differences in wages, unemployment and shadow employment rates on the basis of special assumptions about the behavior of Russian enterprises. The "labor hoarding" phenomenon common for Russian industry during the 1990's allows us to introduce a distinction between the labor stimulation strategy of economically efficient enterprises, on the one hand, and the employment stimulation strategy of economically inefficient ones interested in maximizing their political weight in terms of employment size, on the other. Econometric models constructed to test this assumption suggest that regions with relatively backward economic structure do in fact demonstrate signs of the employment stimulation practice. Moreover, the logic of political influence appears to be the most likely reason behind this empirical pattern.