Journal of Business & Economic Policy

How Quiet Flows the Don? An Analysis of Labor Productivity Trends in Rural Rostov Oblast 2010-2021
Dr. Gregory Brock

Abstract
Labor productivity in rural Rostov Oblast is examined before and after the 2014 Ukrainian incursion across forty-three districts using six economic sectors’ wages and labor force. A shift-share analysis indicates that throughout 2010-2021 improved aggregate labor productivity was primarily due to intra-sectoral rather than inter-sectoral labor reallocation. The re-allocation of labor toward relatively less productive sectors substantially declines 2014-2019 compared to 2010-2013 but then rises again in comparison with a longer period 2014-2021 suggesting labor misallocation may have been influenced by the onset of the pandemic. While descriptive statistics such as labor shares and real wage growth appear unaffected by the adjacent Ukrainian 2014 incursion, rayons directly on the border with Ukraine exhibit a reversal of intra-sectoral labor allocation importance relative to inter-sectoral labor allocation after 2013 with the latter now responsible for improved labor productivity.

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