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The Annals of Regional Science

, Volume 61, Issue 1, pp 1–30 | Cite as

Spatial convergence of real wages in Russian cities

  • Vera Ivanova
Original Paper
  • 278 Downloads

Abstract

This paper provides an empirical test of spatial wage convergence in Russian cities. Using geo-coded data covering 997 Russian cities and towns from 1996 to 2013, I show that real city wages (i) converge over time and (ii) are significantly affected by the initial levels of real wages in neighboring cities. I also find that cities of the Far North, where a special wage policy is implemented, were converging more slowly than the rest of the country. I find a significant negative impact of regional subsidies on real wages in cities outside the Far North and that the effect of extractive industries on real wage has become weaker. These results are robust to the radius of spatial interaction, and my conclusions hold if remote settlements are not taken into account.

JEL Classification

R11 O18 

Notes

Acknowledgements

I owe special thanks to Kristian Behrens, Philip Ushchev, an anonymous referee of the HSE Working Paper Series in Economics, the editor, and two anonymous referees for their detailed comments and suggestions. Earlier versions of this paper were presented at the IX World Conference of the Spatial Econometrics Association, 2nd Annual Conference of the IAAE, 55th Congress of the ERSA, 13th International Workshop Spatial Econometrics and Statistics, 2014 Asian Meeting of the Econometric Society, 15th International Meeting of the APET, 2nd International Conference on Applied Research in Economics, International conference “Modern Econometric Tools and Applications,” and seminars of HSE CMSSE; comments by participants are greatly appreciated. I am also grateful to Giuseppe Arbia, Olga Demidova, Evgenia Kolomak, Leonid Limonov, Florian Mayneris, Tatiana Mikhailova, Eirini Tatsi, Jacques Thisse, Elena Vakulenko, Natalia Volchkova, and Jeffrey Wooldridge for their advice on some of the issues considered in this paper. The study has been funded by the Russian Academic Excellence Project ‘5-100’.

Compliance with ethical standards

Conflict of interest

No potential conflict of interest was reported by the author.

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Copyright information

© Springer-Verlag GmbH Germany 2017

Authors and Affiliations

  1. 1.National Research University Higher School of EconomicsSaint-PetersburgRussian Federation

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