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Worker Training in a Restructuring Economy: Evidence from the Russian Transition

In: Worker Wellbeing in a Changing Labor Market

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Abstract

We use 1994-1998 data from the Russian Longitudinal Monitoring Survey (RLMS) to measure the incidence and determinants of several types of worker training and to estimate the effects of training on workers’ interindustry, interfirm, and occupational mobility, their labor force transitions, and their wage growth in Russia compared to the U.S. We hypothesize that the shock of economic liberalization in Russia may raise the benefits of training, particularly retraining for new jobs, but uncertainty concerning the revaluation of skills may raise the costs, with an overall ambiguous effect on the amount of training undertaken. The RLMS indicates a lower rate of formal training than studies have found for the U.S., suggesting that the second effect dominates. Previous schooling is estimated to affect the probability of training positively, but the relationship is much stronger for additional training in the same field than for retraining for new fields, consistent with the hypothesis that schooling and training are complementary but become more substitutable in a restructuring environment. Additional training in workers’ current fields is estimated to reduce mobility and earnings, suggesting inertial programs from the pre-transition era. Retraining in new fields increases all types of worker mobility and has higher returns than those typically observed for training in the U.S., but it also raises the variance of earnings and the probability of unemployment, consistent with a search view of such retraining. Given the large returns to retraining, the efforts of Russian workers to learn new skills may increase as uncertainty is resolved and restructuring proceeds.

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Bibliographic Info

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This chapter was published in: Soloman W. Polachek (ed.) Worker Wellbeing in a Changing Labor Market, Elsevier Science, pages 159-189, 2001.

This item is provided by W.E. Upjohn Institute for Employment Research in its series Book chapters authored by Upjohn Institute researchers with number mbjseks.

Handle: RePEc:upj:uchaps:mbjseks

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Keywords: worker training; workforce development; russia; restructuring;

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References

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  1. Orazem, Peter F. & Vodopivec, Milan, 1997. "Value of human capital in transition to market: Evidence from Slovenia," European Economic Review, Elsevier, vol. 41(3-5), pages 893-903, April.
  2. Christopher J. O'Leary, 1997. "A net impact analysis of active labour programmes in Hungary," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(2), pages 453-484, November.
  3. Jonathan R. Veum, 1995. "Sources of training and their impact on wages," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(4), pages 812-826, July.
  4. Lechner, Michael, 1999. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," IZA Discussion Papers 93, Institute for the Study of Labor (IZA).
  5. Jochen Kluve & Hartmut Lehmann & Christopher Schmidt, 1998. "Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization or Benefit Churning?," William Davidson Institute Working Papers Series 215, William Davidson Institute at the University of Michigan.
  6. Tito Boeri & Christopher Flinn, 1997. "Returns to Mobility in the transition to a Market Economy," William Davidson Institute Working Papers Series 108, William Davidson Institute at the University of Michigan.
  7. Parent, D., 1995. "Wages and Mobility: the Impact of Employer-Provided Training," Cahiers de recherche 9507, Universite de Montreal, Departement de sciences economiques.
  8. Alan Felstead & Francis Green & Ken Mayhew & Alan Pack, 1999. "The Impact of Training on Labour Mobility," Studies in Economics 9910, Department of Economics, University of Kent.
  9. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
  10. John M. Barron & Mark C. Berger & Dan A. Black, 1999. "Do Workers Pay for On-The-Job Training?," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 235-252.
  11. Catalin Pauna & John S. Earle, 1998. "Long-term unemployment, social assistance and labor market policies in Romania," Empirical Economics, Springer, vol. 23(1/2), pages 203-235.
  12. Lubyova, Martina & van Ours, Jan C., 1999. "Effects of Active Labor Market Programs on the Transition Rate from Unemployment into Regular Jobs in the Slovak Republic," Journal of Comparative Economics, Elsevier, vol. 27(1), pages 90-112, March.
  13. John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Upjohn Working Papers and Journal Articles 02-77, W.E. Upjohn Institute for Employment Research.
  14. Mark A. Loewenstein & James R. Spletzer, 1997. "Delayed formal on-the-job training," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(1), pages 82-99, October.
  15. repec:eme:rlepps:v:18:y:1999:i:1999:p:403-438 is not listed on IDEAS
  16. Ann P. Bartel & Nachum Sicherman, 1997. "Technological Change and Wages: An Inter-Industry Analysis," NBER Working Papers 5941, National Bureau of Economic Research, Inc.
  17. John M. Barron & Mark C. Berger & Dan A. Black, 1997. "On-the-Job Training," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ojt, December.
  18. Lisa M. Lynch & Sandra E. Black, 1998. "Beyond the incidence of employer-provided training," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(1), pages 64-81, October.
  19. Ann P. Bartel & Nachum Sicherman, 1995. "Technological Change and the Skill Acquisition of Young Workers," NBER Working Papers 5107, National Bureau of Economic Research, Inc.
  20. Terrell, Katherine & Sorm, Vit, 1999. "Labor Market Policies and Unemployment in the Czech Republic," Journal of Comparative Economics, Elsevier, vol. 27(1), pages 33-60, March.
  21. Jonathan R. Veum, 1997. "Training and job mobility among young workers in the United States," Journal of Population Economics, Springer, vol. 10(2), pages 219-233.
  22. Christopher J. O'Leary & Piotr Kolodziejczyk & Gyorgy Lazar, . "The Net Impact of Active Labour Market Programmes in Hungary and Poland," Upjohn Working Papers and Journal Articles cjo19983, W.E. Upjohn Institute for Employment Research.
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Citations

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Cited by:
  1. Travkin, Pavel, 2014. "The impact of the on-the-job training on Russian worker’s salary: The effect of abilities approach," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 51-70.
  2. Pavel V. Travkin, 2014. "The Returns To Training In Russia: A Difference-In-Differences Analysis," HSE Working papers WP BRP 56/EC/2014, National Research University Higher School of Economics.
  3. Olga Lazareva, 2009. "Health Effects of Occupational Change," Working Papers w0129, Center for Economic and Financial Research (CEFIR).
  4. Johnes, Geraint & Tanaka, Yasuhide, 2008. "Changes in gender wage discrimination in the 1990s: A tale of three very different economies," Japan and the World Economy, Elsevier, vol. 20(1), pages 97-113, January.

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