The rural/urban wage gap in the industrialisation of Russia, 1884-1910

Abstract

This article presents econometric evidence of integration in rural and urban wages in Russia's Northwest in the late tsarist era. Using the Autoregressive Distributed Lag (ARDL) approach to co-integration and error correction modelling, we show the flexibility of the rural wage in response to the lagged rural/urban wage ratio. Applying the model developed by Boyer and Hatton (1994) and Hatton and Williamson (1991a, 1991b, we show the similarity of the wage gap in northwest Russia in the late tsarist era to that during industrialisation in the US, England and Western Europe. Although our evidence does not necessarily describe countrywide trends, it does support for an industrialising region the more positive view of the degree and nature of late tsarist economic growth. Growth was not slowing down, and there is little evidence of constraints on migration by traditional agrarian institutions.

The Economic Effects of the Abolition of Serfdom: Evidence from the Russian Empire

“…A possible reason for why the abolition of serfdom had differential effects across provinces on industrial output is that the reform affected industry mostly through labor market spillovers, which could only occur in places where peasants were tied to large landlords' farms. The large magnitude of the effect on industrial development that we find is in line with findings on the substantial level of labor migration within provinces from villages into the provincial industrial sector in the late nineteenth century in spite of the constraints erected by the peasant commune (Borodkin, Granville, and Leonard 2008;Burds 1998;Crisp 1976;and Nafziger 2010). Figure 8 presents the estimates of the dynamics of the effect of the abolition of serfdom on industrial output (similarly to Figure 7); it confirms the absence of pre-trends, as the estimates for the years before the emancipation are small and statistically insignificant.…”

Cliometric Approaches to Central, East, and South-East Europe

“…Assuming that industry was not (negatively) affected by the abolition of serfdom in provinces where labor was free to begin with, the difference-in-differences estimates yield that, in an average province where 45% of rural population was comprised of serfs, the abolition of serfdom led to an additional increase in industrial output of 39% throughout the second half of the nineteenth century. This result is consistent with findings on the substantial level of labor migration within provinces from villages into the provincial industrial sector in the late nineteenth century in spite of the constraints erected by the peasant commune (Borodkin et al 2008;Nafziger 2010). When projecting these results on the national level, the authors find that the abolition of serfdom led to an increase of Russia's GDP of 17.7%.…”

The Industrialization and Economic Development of Russia through the Lens of a Neoclassical Growth Model

“…Crisp (1978, p. 323-325) and Gregory (1994) argue that communal restrictions on rural-urban migration were not a binding constraint for industrialization. Borodkin et al (2008) use time-series evidence for the Saint Petersburg region and Nafziger (2010) analyses a household-level data set of villages in the Moscow province to reach similar conclusions.…”