Labor Shortage in the Regions of Russia

Abstract

The objective of this research is 1) to explore time and space characteristics, as well as the origin of labor shortage and 2) to find out whether there exists a long-run equilibrium relationship between labor shortage and its determinants using panel data for 82 subjects of the Russian Federation over 2000–2021 and some tools of panel data econometrics. Since 2012 the number of job vacancies has exceeded the number of unemployed persons, and this excess has become a permanent feature of the labor market. The job vacancy rate grew by 0,12% annually and doubled over the observation period, which means ‘labor hunger’ did not fall as snow from the sky. In 78% of panel observations the job vacancy rate does not exceed the market benchmark of 3,5% , and the number of regions with a very low job vacancy rate greatly exceeds the number with a high rate, which does not support the idea of ‘labor hunger’ countrywide. The demand for blue-color workers is well above the average in industrial Russia, and the demand for white-color workers is above average in in less industrialized regions. There is a shortage of blue-color workers in regions with developed manufacturing, transportation, and service sector. Hence a high job vacancy rate for blue-color labor. Yes, there is another Russia, where these sectors are underdeveloped generating weak demand for blue-color labor. Labor shortage is multiregional shortage of predominantly blue-color workers. The results of econometric exercises suggest there is a long-run equilibrium relationship between labor shortage and its determinants such as real wage, the level of unemployment and business cycle

Keywords

• labour force shortage
• excess demand for labour
• cointegration
• region
• russia