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Labor Supply in Russia: Studying the Role of Outside Options of the Employed

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  • Matveenko Vladimir
  • Saveliev Peter

Abstract

Based on the panel data of the Russian Longitudinal Monitoring Survey (RLMS) for years 1994–2000 the factors determining men's and women's labor supply at the primary job have been identified. A theoretical model of labor supply for two-sector economy (primary job sector and moonlighting sector) is proposed. The two sectors are heterogeneous at hourly wage rates and at the volume of social benefits and privileges. It is shown theoretically that the moonlighting wage rate is a negative factor for labor supply at the primary job; it is true not only for moonlighters but also for those who are employed at a single job in the primary employment sector. This result is confirmed econometrically for men but not for women. It is also shown that the wage rate and social benefits at the primary job are positive factors for men's and women's labor supply at the primary job, while the State ownership is a negative factor of their labor supply.

Suggested Citation

  • Matveenko Vladimir & Saveliev Peter, 2005. "Labor Supply in Russia: Studying the Role of Outside Options of the Employed," EERC Working Paper Series 00-215e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:00-215e
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    References listed on IDEAS

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    1. Smith Conway, Karen & Kimmel, Jean, 1998. "Male labor supply estimates and the decision to moonlight," Labour Economics, Elsevier, vol. 5(2), pages 135-166, June.
    2. Razumova Tatyana & Roshchin Sergey, 2002. "Secondary Employment in Russia Labor Supply Modeling," EERC Working Paper Series 02-07e, EERC Research Network, Russia and CIS.
    3. Gronau, Reuben, 1977. "Leisure, Home Production, and Work-The Theory of the Allocation of Time Revisited," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1099-1123, December.
    4. Mark C. Foley, 1997. "Multiple Job Holding in Russia During Economic Transition," Working Papers 781, Economic Growth Center, Yale University.
    5. Alessandra Guariglia & Byung-Yeon Kim, 1999. "Unemployment Risk, Precautionary Savings, and Moonlighting in Russia," William Davidson Institute Working Papers Series 232, William Davidson Institute at the University of Michigan.
    6. Gershon Cooper, 1952. "Taxation and Incentive in Mobilization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 66(1), pages 43-66.
    7. Bouev Maxim & Matveenko Vladimir & Vostroknutova Ekaterina, 1998. "Transformational Decline and Preconditions of Growth in Russia," EERC Working Paper Series 98-03e, EERC Research Network, Russia and CIS.
    8. Gershon Cooper, 1952. "Taxation and Incentive in Mobilization: Reply," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 66(4), pages 609-613.
    9. Foley, Mark C., 1997. "Multiple Job Holding in Russia During Economic Transition," Center Discussion Papers 28453, Yale University, Economic Growth Center.
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    Cited by:

    1. Duncan, Denvil & Peter, Klara Sabirianova, 2009. "Does Labor Supply Respond to a Flat Tax? Evidence from the Russian Tax Reform," IZA Discussion Papers 4257, Institute of Labor Economics (IZA).
    2. Denvil Duncan & Klara Sabirianova Peter, 2010. "Does labour supply respond to a flat tax?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(2), pages 365-404, April.

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    More about this item

    Keywords

    Russia; labor supply; moonlighting; social benefits; microeconomic models; Heckman's model; panel regressions;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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