Perceptions and Behavior: Analyzing Wage Arrears in Russia

53 Pages Posted: 27 Sep 2007

See all articles by Susan J. Linz

Susan J. Linz

Michigan State University

Anastasia Semykina

Michigan State University

Date Written: June 2006


We investigate the link between perceptions and behavior using the wage arrears phenomenon in Russia as our case study. To measure perception, we utilize assessments of 'marketability' - what we call perceived demand. For behavior, we first consider the behavior of managers in the allocation of wage arrears, and second, the response by workers to wage arrears. Using Russian Longitudinal Monitoring Survey data collected between 1994 and 2004 and controlling for regional macroeconomic conditions, firm characteristics and worker characteristics in the probit and Poisson regressions, we find that managers avoid allocating wage arrears to workers with high perceived demand. We argue that this happens because workers with high perceived demand tend to have more employment options and consequently are more likely to quit their jobs. Managers try to retain these workers by reducing their wage arrears. Our empirical results support this argument, as we find that job change is reduced by lowering arrears.

Keywords: perceived demand, wage arrears, perceptions, behavior, Russia

JEL Classification: A12, J24, J30, J50, P20

Suggested Citation

Linz, Susan J. and Semykina, Anastasia, Perceptions and Behavior: Analyzing Wage Arrears in Russia (June 2006). William Davidson Institute Working Paper No. 869, Available at SSRN: or

Susan J. Linz (Contact Author)

Michigan State University ( email )

Department of Economics
110 Marshall Hall
East Lansing, MI 48824
United States
(517) 353-7280 (Phone)
(517) 432-1068 (Fax)

Anastasia Semykina

Michigan State University ( email )

Agriculture Hall
East Lansing, MI 48824-1122
United States

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