Estimating the Soviet Wage Bill from the Receipts of the Social Insurance System

Abstract

In recent years information has appeared in various Soviet publications which has enabled students of the Soviet economy to compute the average wage of Soviet workers and employees with a considerable degree of confidence. Generally the data provided have been in the form of percentage increases in the average wage above a base year for which the average wage is known or has been reliably estimated. Mtuch of this information has been summarized in an article by Holzman, and he presents there an index of the rise in the average Soviet wage since 1928.' This development very likely also contributes to increased accuracy in estimates of the wage bill, as figures are readily available on the size of the nonagricultural labor force for thiese years. But gaps still exist in our knowledge. Statistics of the type used by Holzman andi others in calculating the average wage have not been published for some of the years prior to 1950. However, inforination recently discovered on the average social insurance tax rates makes it possible to utilize social insurance receipts to estimate the wage bill and average wage with greater confidence; and, in the absence of more direct indications. greater reliance can now be placed on this technique. It is interesting to note that during the lengthy period when the Soviets issued almost no data on the wage bill or average wage they continued to publish statistics on social insurance income, which is derived from a payroll tax. A brief description of how the social insurance tax is administered will clarify the relationship between the wage bill and social insurance receipts. The system of social insurance taxation that has been in effect since 1937 provides for the assignment of a specific tax rate to each central trade union organization, and the agencies that employ labor pay the rate applicable to the union that has jurisdiction over their employees.