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Working paper

Механизмы формирования заработной платы в российской промышленности

The paper examines a specific model of wagesetting evolved in Russia under transition. Using new survey data author reveals paradoxical characteristics of wage!setting mechanisms at Russian industrial enterprises: very high union and collective agreement coverage; nearly unilateral control of managers over wage determination; close correlation between earnings and enterprises' performance; voluntary utilization of wage standards established by state. Special section explores effects of fulfilling a new provision stipulated for by recently adopted Labor Code to raise minimum wage to subsistence minimum level. Author concludes that wage!setting in the Russian labor market is at odds with a textbook competitive model and poorly fits into many other sophisticated theoretical schemes (such as labor!managed firms, bargaining models etc.).