Boosting Productivity in Russia: Skills, Education and Innovation

Lilas Demmou; Andreas Wörgötter

doi:https://doi.org/10.1787/5js4w26114r2-en

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

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ISSN: 18151973 (online)
https://doi.org/10.1787/18151973

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Boosting Productivity in Russia

Skills, Education and Innovation

The labour market in Russia is very flexible. Firms adjust to economic shocks through wage cuts, working hour reductions and minimisation of non-wage labour costs. Workers react by changing jobs. This results in a high and stable overall employment rate, but also high wage inequality, informality and labour turnover, which limits incentives for firms to invest in human capital and productivity improvements.

While educational attainment is very high, the education system needs to be strengthened to respond to the needs of a skill-based economy. School-employer cooperation is low and opportunities for higher education are unequally distributed. Adequate funding for education institutions is not assured everywhere while inefficiencies persist.

Private spending on innovation is very low and Russia underperforms in terms of scientific outputs and patents. Support for low-tech innovation and technology adoption, especially among SMEs is narrow because of a bias towards large and high-tech projects, which however are only loosely related to Russian manufacturing capacity. Reform of the public R&D sector is incomplete, notably with respect to strengthening funding on a competitive basis.

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Keywords: active labour market policies, VET, collective bargaining, inequality, trade unions, skills matching, unemployment benefits, innovation, labour turnover, human capital, life-long learning, PISA, education, flexibility

JEL: I2: Health, Education, and Welfare / Education and Research Institutions; J24: Labor and Demographic Economics / Demand and Supply of Labor / Human Capital; Skills; Occupational Choice; Labor Productivity; J60: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Mobility, Unemployment, Vacancies, and Immigrant Workers: General; J21: Labor and Demographic Economics / Demand and Supply of Labor / Labor Force and Employment, Size, and Structure; J50: Labor and Demographic Economics / Labor-Management Relations, Trade Unions, and Collective Bargaining / Labor-Management Relations, Trade Unions, and Collective Bargaining: General; O3: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights; J31: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Wage Level and Structure; Wage Differentials

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