Abstract:

The need for labor market regulation has been the subject of debate since the turn of the century. As studies of this problem in Russia has shown labor market regulation results in numerous negative consequences. First of all, in high hidden unemployment, which affects labor productivity. However, Russian labor market has a number of distinctive features, one of them being high state participation in the economy. This leads to labor market being regulated by the state, not by the need for efficiency. However, this is not the only feature. In Russia the level of corruption is very high. Therefore, the issue of labor market regulation cannot be fully analyzed without this factor being taken into account. The paper analyzes labor corruption in sectors such as public administration, education and healthcare. It gives explanation to the extremely low productivity in these spheres. The paper  shows that labor corruption significantly enhances negative impact of the existing labor market regulation in these sectors, especially in public administration.