Tatiana Karabchuk Laboratory for Comparative Social ResearchNational Research University Higher School of Economicstkarabchuk@hse.ru

EACES conferencePaisley, September 6-8, 2012

1. Problem and motivation2. Research goal and tasks3. Literature review4. Data and methodology5. Preliminary results6. Further research steps

The analyzed material from the collected interviews shows that there is a definite problem with ineffective wage setting in the police system.

It is interesting that policy makers, public authorities and police officers speak about the same problem – low wage rates of policemen.

From broad literature and mass media we know that both conventional and unconventional economic activities take place in police. Do the mentioned low wages stimulate the growth of informal payments among policemen?

The main aim of the research is to describe wage setting process and informal payment system in the police and to analyze the linkages between them.

The tasks are: To trace the wage distribution among policemen and reveal

the factors of it. To disclose the impact of legal wage size on the attitudes

toward the additional activities (informal payments).

Two blocks of literature could be applied:1) The first block contains papers on wage setting,

wage factors, wage distribution as well as fair payments. This part of literature is much bigger and dates to 1950s

2) The second block comprises from all sort of informal economic behavior of policemen: conventional and unconventional. This part of literature is less thicker and dates to early 1960s

WAGE EFFICIENCY AND RENT SEEKING THEORIES Bhagwati and Srinivasan, Journal

of Political Economy, (1980). Shapiro and Stiglitz, American

Economic Review, (1984) Appelbaum and Katz, The

Economic Journal, (1987). Brown, Industrial and Labour

Relations Review, (1990) Nickell and Nicolitsas, Labour

Economics, (1997) Campbell and Kamlani, (1997) Ichino and Maggi, (2000) Lazear, The American Economic

Review, (2000) Chang and Ching-chong Lai,The

Scandinavian Journal of Economics, (2002)

CORRUPTION AND MOONLIGHTING BEHAVIOR

Becker , Journal of Political Economy,(1968)

Beck, Paul J., and Michael W. Mahe, Economic Letters, (1986)

Bayley and Shearing, Law & Society Review, (1996)

Braguinsky, Contemporary Economic Policy, (1996)

Tanzi, Staff Papers - International Monetary Fund (1998)

Anon , Jakarta Post, (2004) Ayling, and Grabosky,

International Journal of Police Strategies and Management, (2006)

Ayling and Shearing, Criminology and Criminal Justice, (2008)

Empirical research on police formal and informal payments is not so rich. There are several country studies that demonstrates very interesting and different results.

1. Bayley, 1996 (The Police and Political Development in Europe)2. Zvekic, 1998 (Countries in transition)3. Darryl D'Monte, 2000 (Asian societies and corruption)4. Beck & Ruth ,2002 (Attitudes to Corruption Amongst Russian

PoliceOfficers and Trainees)5. Tymoty Frye, 2002 (Police as an obstacle for business)6. Shleifer & Treisman, 2004 (Normal Country)7. Robertson, 2004 (Police reform in Russia)8. Wallace and Latcheva, 2006 (Corruption, Trust in Public

Institutions and the Informal Economy in Transition Countries of Central and Eastern Europe)

9. Ayling and Shearing, 2008 (Australia case of police corruption)10.Gerber, Mendelson, 2008 (Russian case of public abuse by police)

• The wage of a policeman consists of:– Formal basic payment according to the position and ranking;– Benefit for number or years;– Benefit for scientific position and rank;– Additional payments (surplus) for good work, difficulties

and etc.• The basis for the wage is an order that a person is taken for

this position.• All the surpluses and benefits are given by the local cheefs.

Data:1. Series of interviews done in Bulgaria, Kazakhstan

and Russia2. Survey of policemen conducted in 2011 in Bulgaria,

Russia and Kazakhstan (each country for 450-500 respondents).

Dependent variable: lnwage

Independent variables: Gender age Education (3 dummies) Position/rank (3 dummies) Department (13 dummies) Hours of work Year of coming to the city

level of crime Russia Bulgaria Kazakhstan

Has grown 10,7 21,8 38,1

Has decreased 37,6 35,8 22,1

Is the same 47,3 38,2 29,6

Russia Bulgaria Kazakhstan

Low level of trust to police is the obstacle toward fruitful relation 68 74,2 64,8

It is important to have population support 96 98 97,8

It is important to have close and good relations with people in the area 92 97 96

Changes within the last year Russia Bulgaria Kazakhstan

wages increase, % 33 12,2 56,0

no change in wages, % 54,5 60,0 28,3no change in job assessment, % 68 64,6 56,6Downward change in job assessment, % 13,6 19,8 18,1

paper work increased, % 42,7 65,8 36,7

hours of work increased, % 40 17,8 39,2control from the heads increased, % 67 64 80,8

Characteristics of job places Russia Bulgaria Kazakhstanworking hours for males, hours 9,9 9,8 12,2working hours for females, hours 9,7 8,9 11,3usually punished for bribery, % 25 37,8 31,3usually punished for criminal relations, % 30 34,2 19,9see no lack in the current system of police work assessment, % 16 15,8 17,7need a new system of police work assessment,% 75 70,4 56

Characteristics of wages Russia Bulgaria Kazakhstan

wage is very important feature of job, % 22,7 16 7,6

could buy less on their wage , % 25,6 84,2 27,4

have negative attitude towards additional work and income, % 12,4 20,8 11,9

report that policemen need additional earning to support their regular activity, % 60 23,6 63,9

declare that they are engaged in the additional activities because of low wages, % 70,7 75,4 63,9

division by sex

Avarage declared

monthly wage without taxes in

2011

Mimimum declared monthly

wage

Averae declared monthly wage

without taxes in 2010

ideal wage for a person at your

position

the share of those who work additionally in your area/get additional income

men mean 674 90 609 1447 34,7number of observations 274 235 252 298 205standard deviation 283 92 258 827 21,594

women mean 627 84 560 1436 39,5number of observations 97 82 87 92 61standard deviation 276 68 187 562 27,085

total mean 662 88 597 1444 35,8number of observations 371 317 339 390 266standard deviation 281 86 242 772 23,002

division by sex

Avarage declared

monthly wage without taxes in

2011

Mimimum declared

monthly wage

Averae declared monthly wage

without taxes in 2010

ideal wage for a person at your

position

the share of those who work additionally in your area/get additional income

men mean 681 42 635 1160 25number of observations 312 223 281 342 207standard deviation 148 104 205 606 25

women mean 622 34 575 1037 24number of observations 53 34 44 59 28standard deviation 155 61 170 356 25

total mean 672 41 626 1142 25number of observations 365 257 325 401 235standard deviation 150 100 201 577 25

division by sex

Avarage declared

monthly wage without taxes in

2011

Mimimum declared

monthly wage

Averae declared monthly wage

without taxes in 2010

ideal wage for a person at your

position

the share of those who work additionally in your area/get additional income

men mean 519 45 433 1046 29number of observations 270 223 226 263 147standard deviation 143 83 163 438 30

women mean 501 43 396 988 40number of observations 102 91 85 102 56standard deviation 141 82 158 522 26

total mean 514 44 423 1030 32number of observations 372 314 311 365 203standard deviation 142 83 162 463 29

The difference in wages between low level, middle level and high level positions is much higher in Russia, than in Bulgaria and Kazakhstan

Big differentiation between the departments, the lowest wages are in point duty police and road police and the highest are in self-security departments. This is true for all three countries.

Russia Bulgaria Kazakhstangender -0.0244 0.0682* 0.0598

(-0.44) (2.17) (1.67)age 0.00908** 0.0114*** 0.00655*

(2.90) (8.08) (2.55)Tertiary+proffession 0.0731 0.188*** 0.00838

(1.25) (5.83) (0.21)Tertiary 0.0837 0.170*** 0.0461

(1.25) (5.79) (0.61)Low level position -0.145* -0.128*** -0.133**

(-2.33) (-6.49) (-2.95)High level position 0.234*** 0.0883** 0.128***

(4.02) (3.30) (3.55)Departments All negative in comparison to headquartersWorking hours 0.0182 0.00567 0.00472

(1.63) (1.51) (0.72)Year of coming to city -0.00422* 0.00119 0.000438

(-2.06) (1.74) (0.37)Intercept 17.89*** 3.992** 10.17***

(4.35) (2.87) (4.34)N 285 340 313R2 0.3476 0.5853 0.2847

Law consulting 74,7scientific and art activity 72,3presents and grants 61,5enterprenearship 55,1payment instead of administration fees 55speeding up the process 52,3private criminal investigation 49accompaning products 48,7commercial organization security 44enterprises' checks 40,9launching or stopping the cases 36foundation establishment 35,8accompanying cars through traffic jams 34,5dealing with business conflicts 28

The main determinants for high wage in police are age, position/rank, departments. Education does not have significant effect in Russia and Kazakhstan. No effects of working hours!

Almost no real changes in wages in Russia, growth of wages in Kazakhstan and decrease in real wags in Bulgaria

Disapprove telling about corruption in their office to the security department:

47,6%-??? 37,4% -??? 6,2% - ???

Opportunities for additional work have decreased during the last 2 years (in Russia 35%, Kazakhstan -50%, Bulgaria – 70%)

The assessment of the factors of attitudes towards additional activities in police

How to measure wage differences between policemen and other workers in budget sector and employees from non-budget sector?