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

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Author Info

  • Berger, Mark C.

    (CBER, University of Kentucky)

  • Earle, John S.

    ()
    (George Mason University)

  • Peter, Klara Sabirianova

    ()
    (University of North Carolina, Chapel Hill)

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

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 361.

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Length: 51 pages
Date of creation: Sep 2001
Date of revision:
Publication status: published in: Research in Labor Economics, 2001, 20, 159-190
Handle: RePEc:iza:izadps:dp361

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Keywords: restructuring; wage growth; human capital investments; On-the-job training;

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References

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  1. Christopher J. O'Leary, . "A Net Impact Analysis of Active Labour Programmes in Hungary," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research cjo1997, W.E. Upjohn Institute for Employment Research.
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  3. John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research 02-77, W.E. Upjohn Institute for Employment Research.
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  8. 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.
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  15. 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.
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  17. Catalin Pauna & John S. Earle, 1998. "Long-term unemployment, social assistance and labor market policies in Romania," Empirical Economics, Springer, Springer, vol. 23(1/2), pages 203-235.
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  22. 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.
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Citations

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Cited by:
  1. Pavel V. Travkin, 2014. "The Returns To Training In Russia: A Difference-In-Differences Analysis," HSE Working papers, National Research University Higher School of Economics WP BRP 56/EC/2014, National Research University Higher School of Economics.
  2. 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.
  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, Elsevier, vol. 20(1), pages 97-113, January.

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