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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. Jochen Kluve & Hartmut Lehmann & Christophe M. Schmidt, 1999. "Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization or Benefit Churning?," LICOS Discussion Papers, LICOS - Centre for Institutions and Economic Performance, KU Leuven 8099, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
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  8. 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.
  9. 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.
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  16. 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.
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  21. 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.
  22. 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.
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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 WP BRP 56/EC/2014, National Research University Higher School of Economics.
  2. 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.
  3. Olga Lazareva, 2009. "Health Effects of Occupational Change," Working Papers w0129, Center for Economic and Financial Research (CEFIR).
  4. 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.

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