Labor Productivity in Transition: A Regional Analysis of Russian Industry

Abstract

This paper examines within-industry variation in labor productivity at the beginning of Russia's transition process in 1992, as well as regional variation in the percentage of firms that exhibit below industry average labor productivity. The main hypothesis is that industries and regions where a disproportionate share of firms exhibited below average labor productivity in 1992 will experience above average employment reductions between 1992 and 1995. In only 25 percent of the locales included in this analysis, however, does the predicted match emerge. Most of these locales are located in the Central region.