To Pay or Not to Pay: Managerial Decision Making and Wage Withholding in Russia
In this paper we investigate the decisions of Russian managers in distributing wage nonpayment in Russia during the 1994-96 period. Using a longitudinal survey of households, we identify a pattern of wage arrears across regions and industries which suggests that managers allocated nonpayment among workers so as to minimize the real wage declines experienced by higher productivity workers. This finding suggests that post-Soviet managers were responding more strongly to market incentives than to equity considerations in their wage withholding allocation decisions.
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