Institutional Traps of Wages and Income Inequality
Institutional Traps of Wages and Income Inequality

Summary/Abstract: The experience of countries with developed economies testifies to the constructiveness of labor relations. However, the prerequisites of the behavior of actors in social and labor relations, the presence of institutional opportunism, and the increased role of the methodology for researching the labor inequality make a strong case for a theoretical and methodological justification for reassessing social and labor relations and reforming the institution of labor compensation based on the study of institutional traps. The article deals with the analysis of institutional traps and identification of sources of wages and income inequality and development of methodological, scientific and practical recommendations to analyze the system of indicators affecting the pricing institution in the labor market. To solve the set goals, the authors used special economic methods: comparison by using numerical and content estimates, time series analysis by singling out regular time and trend-dependent components of trends, etc. Based on the obtained data on institutional traps formed in the social and labor sphere, it was established that an increase in the resource price expressed in growth of the wage rate under the pressure of trade unions increases the employers’ costs, slows down the demand for labor, and, consequently, leads to the worsening of the terms of employment, which is a theoretical result of institutional paradigm. The available non-market indicators influence the formation of institutional traps. A matrix of non-market indicators was developed on the basis of the conducted analysis.

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