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Contract Violations, Neighborhood Effects, and Wage Arrears in Russia

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dc.creator Peter, Klara Sabirianova
dc.creator Earle, John S.
dc.date 2004
dc.date.accessioned 2013-10-16T07:10:33Z
dc.date.available 2013-10-16T07:10:33Z
dc.date.issued 2013-10-16
dc.identifier http://hdl.handle.net/10419/20444
dc.identifier ppn:390563285
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/20444
dc.description We present a model of neighborhood effects in wage payment delays. Positive feedback arises because each employer?s arrears affect the late payment costs faced by other firms in the same local labor market, resulting in a strategic complementarity in the practice. The model is estimated on panel data for workers and firms in Russia, facilitating identification through the use of a rich set of covariates and fixed effects at the level of the employee, the employer, and the local labor market. We also exploit a policy intervention affecting public sector workers that provides an instrumental variable to estimate the endogenous reaction in the non-public sector. Consistently across specifications, the estimated reaction function displays strongly positive neighborhood effects, and the estimates of four feedback loops – operating through worker quits, effort, strikes, and legal penalties – imply that costs of delays are attenuated by neighborhood arrears. We also study a nonlinear case exhibiting two stable equilibria: a ?punctual payment equilibrium? and a ?late payment equilibrium.? The estimates imply that the theoretical conditions for multiple equilibria under symmetric local labor market competition are satisfied in our data.
dc.language eng
dc.publisher
dc.relation IZA Discussion paper series 1198
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject A12
dc.subject B52
dc.subject P37
dc.subject J30
dc.subject O17
dc.subject P31
dc.subject K42
dc.subject L14
dc.subject ddc:330
dc.subject wage arrears
dc.subject contract violation
dc.subject neighborhood effect
dc.subject social interactions
dc.subject multiple equilibria
dc.subject network externality
dc.subject strategic complementarity
dc.subject Lohn
dc.subject Verbindlichkeiten
dc.subject Vergütungssystem
dc.subject Nachbarschaftsökonomie
dc.subject Übergangswirtschaft
dc.subject Spieltheorie
dc.subject Schätzung
dc.subject Russland
dc.subject Lohnrückstände
dc.title Contract Violations, Neighborhood Effects, and Wage Arrears in Russia
dc.type doc-type:workingPaper


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