Berger, Mark C. (University of Kentucky and IZA Bonn) Blomquist, Glenn C. (University of Kentucky) Peter, Klara Sabirianova () (WDI, University of Michigan and IZA Bonn)
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The existence of compensating differentials in Russian labor and housing markets is examined using data from the Russian Longitudinal Monitoring Survey (RLMS) augmented by city and regional-specific characteristics from other sources. While Russia is undergoing transition to a market economy, we find ample evidence that compensating differentials for location-specific amenities exist in the labor and housing markets. Our estimated wage and housing value equations suggest that workers are compensated for differences in climate, environmental conditions, ethnic conflicts, crime rates, and health conditions, after controlling for worker characteristics, occupation, industry, and economic conditions, and various housing characteristics. Moreover, we find evidence that these compensating differentials exist even after controlling for the regional pay differences (“regional coefficients”) used by the Russian government to compensate workers for living in regions that are designated as less desirable. We rank 953 Russian cities by quality of life as measured by a group of eleven amenities. Sizable variation in the estimated quality of life across cities exists. The highest ranked cities tend to be in relatively warm areas and areas in the western, European part of the country. In addition, our quality of life index is positively correlated with net migration into a region, suggesting workers are attracted to amenity-rich locations. Overall, we find that sufficient market equilibrium exists and a model of compensating differentials with controls for disequilibrium yields useful information about values of location-specific amenities and quality of life in this large transition economy.
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
900.
References listed on IDEAS 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.:
William D. Nordhaus & James Tobin, 1972.
"Is Growth Obsolete?,"
NBER Chapters,
in: Economic Research: Retrospect and Prospect Vol 5: Economic Growth, pages 1-80
National Bureau of Economic Research, Inc.
[Downloadable!]
Other versions:
William D. Nordhaus & James Tobin, 1973.
"Is Growth Obsolete?,"
NBER Chapters,
in: The Measurement of Economic and Social Performance, pages 509-564
National Bureau of Economic Research, Inc.
[Downloadable!]
Cited by: (explanations, 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.)