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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. Foreign ownership of the firm also positively affects the probability of undertaking training, providing evidence of active restructuring by foreigner investors. 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 employment, 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. Alan Felstead & Francis Green & Ken Mayhew & Alan Pack, 1999. "The Impact of Training on Labour Mobility," Studies in Economics, Department of Economics, University of Kent 9910, Department of Economics, University of Kent.
  2. 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.
  3. 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.
  4. Kluve, Jochen & Lehmann, Hartmut & Schmidt, Christoph M, 1999. "Active Labour Market Policies in Poland: Human Capital Enhancement, Stigmatization or Benefit Churning?," CEPR Discussion Papers 2059, C.E.P.R. Discussion Papers.
  5. Katherine Terrell & Vit Sorm, 1998. "Labor Market Policies and Unemployment in the Czech Republic," William Davidson Institute Working Papers Series 216, William Davidson Institute at the University of Michigan.
  6. Tito Boeri & Christopher J. Flinn, 1999. "Returns to Mobility in the Transition to a Market Economy," William Davidson Institute Working Papers Series 217, William Davidson Institute at the University of Michigan.
  7. 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.
  8. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(2), pages 285-325, April.
  9. Bartel, Ann P & Sicherman, Nachum, 1998. "Technological Change and the Skill Acquisition of Young Workers," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 16(4), pages 718-55, October.
  10. 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, W.E. Upjohn Institute for Employment Research, number ojt.
  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. John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 20(3), pages 661-707, July.
  13. Christopher J. O'Leary, . "A Net Impact Analysis of Active Labour Programmes in Hungary," Upjohn Working Papers and Journal Articles cjo1997, W.E. Upjohn Institute for Employment Research.
  14. 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.
  15. repec:eme:rlepps:v:18:y:1999:i:1999:p:403-438 is not listed on IDEAS
  16. 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.
  17. Daniel Parent, 1995. "Wages and Mobility: The Impact of Employer-Provided Training," CIRANO Working Papers 95s-27, CIRANO.
  18. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
  19. 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.
  20. 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.
  21. 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.
  22. 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.
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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", Publishing House "SINERGIA PRESS", vol. 33(1), pages 51-70.
  2. Olga Lazareva, 2009. "Health Effects of Occupational Change," Working Papers w0129, Center for Economic and Financial Research (CEFIR).
  3. 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.
  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, Elsevier, vol. 20(1), pages 97-113, January.

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