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Labor market responses to shocks in the Russian economy
https://doi.org/10.32609/0042-8736-2025-11-79-101
Abstract
The paper examines the impact of labor supply shocks, wage bargaining shocks, productivity shocks, and external and domestic demand shocks on the Russian labor market from 2017 to 2024. Using a Bayesian vector autoregression (BVAR) identified through sign restrictions and performing a historical decomposition, the study finds that both macroeconomic and market-specific shocks influence key labor market variables. Special attention is given to the factors contributing to labor market imbalances in recent years. The results indicate that the primary drivers of declining unemployment and rising employment since late 2022 have been positive domestic demand and productivity shocks, whereas external demand and wage bargaining shocks have constrained labor demand growth. The labor market conditions observed since spring 2023 can be characterized as a job seeker’s market. The normalization of domestic demand and the rise in real wages are helping to restore equilibrium in the Russian labor market.
Keywords
labor market,
unemployment rate,
labor productivity,
real wages,
macroeconomic shocks,
BVAR,
sign restrictions
JEL: C11, C32, E24, E30, J20, J23, J30, J52
About the Author
I. Y. Darovskii
Bank of Russia
Russian Federation
Russian Federation
Ivan Y. Darovskii - Senior Economist.
St. Petersburg
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For citations:
Darovskii I.Y. Labor market responses to shocks in the Russian economy. Voprosy Ekonomiki. 2025;(11):79-101. (In Russ.) https://doi.org/10.32609/0042-8736-2025-11-79-101
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