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Estimation and Interpretation of the Wage Curve in Russia Considering Spatial Effects

Student: Timofeeva Ekaterina

Supervisor: Olga Demidova

Faculty: Faculty of Economic Sciences

Educational Programme: Economics (Bachelor)

Year of Graduation: 2020

Wage curve is traditionally recognized as a negative relationship between wages and unemployment rates (considering different control variables). The wage curve has been proven to occur in a number of countries, including Russia. Many Russian researchers have devoted their articles to prove the existence of the wage curve in Russia. However, these studies do not include a study of the relationship of regions of one country with each other. This paper is aimed to consider the influence of regions in Russia on each other, as their development cannot take place independently. Ignorance of this fact may lead to a shift in parameter estimates. The spatial econometric apparatus seems to be the most convenient in the study of this issue, in particular, the widely used spatial Darbin model. The sample used in this paper consists of panel data for 2005-2018 for 81 regions of Russia. The outcome of the study is the revealed difference between regions, reflected in the dependence of wages on unemployment, by conduction an analysis of marginal effects for each region.

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