Skip to main content

Remuneration reforms in public sector: a case of Russian healthcare


Kolosnitsyna, Marina (2012). Remuneration reforms in public sector: a case of Russian healthcare. Chinese Business Review, 11(1), 109-118.


In 2008 remuneration reform for public sector was introduced in Russia. Its main idea was to implement P4P principle well-known in business, including more flexible approach to wage setting. This paper presents an attempt to estimate an influence of the new remuneration system (NRS) on earnings level, inequalities and job motivation. The estimates are based on microdata of monitoring survey of healthcare economic problems conducted in Russia in 2009 and 2010. The extended specification of Mincer earning equation and probit-models were used. One could observe increasing wage rates and earning inequalities within healthcare institutions adopted NRS though worker’s experience and regional economic differences remain significant wage determining factors. As it occurs, NRS is widely adopted by large regional and central hospitals while smaller health care institutions show less enthusiasm in implementing reform. Obviously, the larger institutions have more money and better educated administrative staff to introduce the new system. Those chief physicians who adopted NRS point out a positive correlation between earnings and individual input. At the same time, those committed to old principles of wage setting more often note declining job turnover. This latter result could possibly indicate negative personnel sorting, less productive workers tending to stay with employer who doesn’t assess their performance. As concerns anticipated NRS results such as increasing motivation and quality of health services, the evidence is still ambiguous.

Reference Type

Journal Article

Year Published


Journal Title

Chinese Business Review


Kolosnitsyna, Marina