State-Owned Enterprises in the Russian Federation : Employment Practices, Labor Markets, and Firm Performance
Low productivity and the competitiveness of Russian firms have been among Russia's primary economic challenges over the past decade. The Government of Russia (GoR) has made boosting productivity a policy priority and since 2012 has rolled out...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/246661562074950759/State-Owned-Enterprises-in-the-Russian-Federation-Employment-Practices-Labor-Markets-and-Firm-Performance http://hdl.handle.net/10986/32098 |
| Summary: | Low productivity and the competitiveness
of Russian firms have been among Russia's primary
economic challenges over the past decade. The Government of
Russia (GoR) has made boosting productivity a policy
priority and since 2012 has rolled out several visible
policy initiatives to strengthen employment practices in
firms to raise their productivity and positive spillovers,
including the 2012 Plan for Raising the Productivity of
Companies, the 2018-2024 National Project on Labor
Productivity, and 2018-2019 National Plan for Competition
Development. The objective of this report is to contribute
to this productivity agenda by analyzing the employment
practices of state-owned enterprises (SOEs), their
implications for labor supply and internal firm
capabilities, and the influence of state policy. SOEs
contribute a significant share of output and employment in
Russia's economy and academic recent research shows
that they have lower productivity than private sector firms.
The implications of SOE employment practices—compensation
and management—on overall productivity however, has not been
investigated, a gap that this report aims to fill by
analyzing the following questions: What are SOE employment
practices and how do they compare to international and
private sector benchmarks? How do SOE employment practices,
particularly compensation, affect allocation of labor across
firms? How do SOE compensation and management practices
shape their internal capabilities? How does government
financial and non-financial support to SOEs influence these
employment practices? Taking the level and form of
government participation in the economy as a given, the
report focuses primarily on the sector's current
practices, and how government policies towards the sector
can be improved to boost SOE performance and positive
spillovers. We explore these questions using five Russian
microlevel datasets, including worker and firm surveys and a
large firm register. The report utilizes a taxonomy of SOEs
that includes state SOEs which have 100 percent government
ownership, and mixed SOEs which have some share of state
ownership that is less than 100 percent. The report finds
that Russian SOEs pay an overall compensation premium and
that this premium contributes to labor shortages in the
private sector. While overall the SOE sector has a small
wage penalty, wage differentials with the private sector
vary by type and size of the SOEs. Mixed SOEs pay a small
wage premium over the private sector while state SOEs have a
small wage penalty. Both types of SOEs pay a wage premium in
competitive settings. SOEs have an overall compensation
premium as they provide more generous benefits like paid
vacations, maternity leave, and training than private sector firms. |
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