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Why Russian Workers do not Move: Attachment of Workers through In-Kind Payments

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Author Info
Guido Friebel (IDEI)

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Abstract

We relate the phenomena of sluggish interregional labour reallocation and in-kind compensation in Russia to 'attachment' strategies of firms: Paying wages in non- monetary forms makes it hard for workers to raise the cash needed for quitting their region in order to find better jobs in more prosperous regions. While attachment may facilitate worker-specific investments that do not pay off if workers are expected to leave, it also eliminates workers' outside options. Hence, firms may use it to exploit workers. Surprisingly, exploitation through attachment does not only occur in monopsonistic regional labour markets. Even if there is some competition, all firms in a region may use attachment strategies. Here, workers are locked-in and do not receive any compensation for their forgone option to move. Data of the Russian Longitudinal Monitoring Survey (RLMS) support our theory. Workers who receive in-kind payments are less probable to move than workers who do receive their wages in cash.

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Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1376.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:1376

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Marin, Dalia & Schnitzer, Monika, 1995. "Tying Trade Flows: A Theory of Countertrade with Evidence," American Economic Review, American Economic Association, vol. 85(5), pages 1047-64, December. [Downloadable!] (restricted)
  2. Irena Grosfeld & Claudia Senik-Leygonie & Thierry Verdier & Stanislav Kolenikov & Elena Paltseva, 1999. "Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation," William Davidson Institute Working Papers Series 246, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  3. John S. Earle, . "Post-Privatisation Ownership Structure and Productivity in Russian Industrial Enterprises," Working Papers 1999.19, Fondazione Eni Enrico Mattei. [Downloadable!]
  4. Annette N. Brown, 1997. "The Economic Determinants of the Internal Migration Flows in Russia During Transition," William Davidson Institute Working Papers Series 89, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  6. Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, vol. 72(5), pages 968-79, December. [Downloadable!] (restricted)
  7. Ellingsen, Tore, 1998. "Payments in Kind," Working Paper Series in Economics and Finance 244, Stockholm School of Economics, revised 10 Feb 2000. [Downloadable!]
  8. Alston, Lee J & Ferrie, Joseph P, 1993. "Paternalism in Agricultural Labor Contracts in the U.S. South: Implications for the Growth of the Welfare State," American Economic Review, American Economic Association, vol. 83(4), pages 852-76, September. [Downloadable!] (restricted)
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  10. Aghion, P. & Blanchard, O.J., 1993. "On the Speed of Transition in Central Europe," Working papers 93-8, Massachusetts Institute of Technology (MIT), Department of Economics.
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  11. Faggio, Giulia & Konings, Jozef, 1999. "Gross Job Flows and Firm Growth in Transition Countries: Evidence Using Firm Level Data on Five Countries," CEPR Discussion Papers 2261, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  1. Osborne, Stefan & Trueblood, Michael, 2001. "An Examination Of Economic Efficiency Of Russian Crop Output In The Reform Period," 2001 Annual meeting, August 5-8, Chicago, IL 20548, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  2. Haaparanta, Pertti & Juurikkala, Tuuli & Lazareva, Olga & Pirttilä, Jukka & Solanko, Laura & Zhuravskaya, Ekaterina, 2003. "Firms and public service provision in Russia," BOFIT Discussion Papers 16/2003, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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  3. Guariglia, Alessandra & Kim, Byung-Yeon, 2001. "The Dynamics of Moonlighting: What is happening in the Russian informal economy?," BOFIT Discussion Papers 5/2001, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
  4. Yuri Andrienko & Sergei Guriev, 2003. "Determinants of Interregional Mobility in Russia: Evidence from Panel Data," William Davidson Institute Working Papers Series 551, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  5. Haney, Michael & Shkaratan, Maria, 2003. "Mine closure and its impact on the community : five years after mine closure in Romania, Russia and Ukraine," Policy Research Working Paper Series 3083, The World Bank. [Downloadable!]
  6. Klugman, Jeni & Micklewright, John & Redmond, Gerry, 2002. "Poverty in the Transition: Social Expenditures and the Working-Age Poor," CEPR Discussion Papers 3389, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  7. Ariane Lambert-Mogiliansky & Konstantin Sonin & Ekaterina Zhuravskaya, 2003. "Capture of Bankruptcy: Theory and Russian Evidence," Working Papers w0038, Center for Economic and Financial Research (CEFIR). [Downloadable!]
  8. Rozelle, Scott & Swinnen, Johan F.M., 2000. "Transition And Agriculture," Working Papers 11948, University of California, Davis, Department of Agricultural and Resource Economics. [Downloadable!]
  9. Irena Grosfeld & Claudia Senik-Leygonie & Thierry Verdier & Stanislav Kolenikov & Elena Paltseva, 1999. "Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation," William Davidson Institute Working Papers Series 246, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  10. Kaitila, Ville, 2001. "Accession Countries’ Comparative Advantage in the Internal Market: A Trade and Factor Analysis," BOFIT Discussion Papers 3/2001, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
  11. Ruslan Gurtoviy & Luis G. González, 2008. "How Much to Pay in Cash? Employee Retention via Stock Options," Papers on Strategic Interaction 2004-24, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  12. Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
  13. Swinnen, Johan F.M. & Dries, Liesbeth & MacOurs, Karen, 2001. "Transition And Agricultural Labour," 2001 Annual meeting, August 5-8, Chicago, IL 20602, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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  14. Laura Solanko, 2002. "Fiscal competition in a transition economy," Public Economics 0209002, EconWPA. [Downloadable!]
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