Institutional effectiveness estimation of wage indexation

Abstract

The article is aimed at studying the causes of differences between the legally established wage indexation and real labor practice of Russian companies. Based on the neoinstitutional economic analysis, the author selects and investigates the structural and comparative efficiency of indexation, systematizes methods of wage indexation in Russia and conducts an empirical analysis of indexation mechanism in 176 Russian mining and metallurgical companies. The analysis results allow the author to conclude that structural efficiency of wage indexation is low. The main reason of that is a lack of real enforcements of this social guarantee. In the article the author suggests ways to overcome the institutional gaps and develop a unified mechanism for calculating wage indexation. Evaluation of the comparative effectiveness of the wage indexation institute in Russia shows that the institutional gaps in the establishment and implementation of this social guarantee are not random, but depends on the existence of alternative institutions and the specifics of Russian institutional environment. Refs 51. Figs 2. Tables 7.