Impact of wages on employment and migration in the High North of Russia

Lead Author Marina, Giltman
Institution Contact Tyumen State University, 625003, Semakove st., 10, Tyumen, Russia.
Theme Theme 4: Building Long-term Human Capacity
Session Name 4.5 Work and workers in the Arctic
Datetime Thu, Sep 15, 2016 10:45 AM - 11:00 AM
Presentation Type Oral
Abstract text The article examines the impact wages on employment in the High North regions of Russia. The unique features of the labour markets of these territories include compensative differentials and specific labour protection legislation. Compensative differentials do present themselves in the structure of wages of the individuals employed in unfavorable living conditions. Additional employment protection legislation in the High North regions of Russia is based on the Labour Code of the Russian Federation, Chapter 50. It increases the costs to the employer in official hiring, wages and lay-offs, and weakens the enforcement. All this makes the labour supply in the High North of Russia more flexible and labour demand more constrained compared with the rest of the country. Using the panel data for the High North regions of Russia from 2005 to 2013 we have estimated fixed effects models for such dependent variables as number of employees, number of unemployed and net-migration. Our estimations demonstrate that wage is a significant factor, and positively affects interregional migration to the northern regions. Employment and unemployment react to changes of wages with different lags, and in both cases - negatively. This may indicate that even in the case of the need for additional employees in the High North regions it will be covered by immigrants only partly, and partly by the unemployed already living in those regions. The results of our research demonstrate the surplus of labour supply with respect to labour demand in the High North regions of Russia. The reaction to the growth of wages by immigrants from other regions of the country is too strong and eventually leads to lower wages and higher unemployment in the northern territories. The main findings of the paper can be used for providing the social policy in the High North regions of Russia.
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