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Labor Market Uncertainty and Private Sector Labor Supply in Russia

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Author Info
Steven Stillman

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Abstract

The development of a vibrant private sector has been one of the key failures of the transitional period in Russia. This paper develops a theoretical and empirical model of individual labor supply behavior under uncertainty, and estimates this model using data from the Russian Longitudinal Monitoring Survey for the years 1994 - 1996 & 1998. As hypothesized, a decrease in private sector earnings variability is estimated to increase the likelihood of private sector employment for individuals with constrained consumption smoothing ability. Evidence of ex-ante intra-household risk sharing is also found with individuals reducing their exposure to uncertainty by diversifying the portfolio of jobs held by their household.

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Publisher Info
Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number 359.

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Date of creation: 01 Nov 2000
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Handle: RePEc:wdi:papers:2000-359

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Related research
Keywords: Private sector; labor supply; Russia; uncertainty; intra-household;

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health, Education, Welfare, and Poverty
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models
D10 - Microeconomics - - Household Behavior - - - General

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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.:
  1. Chakrabarti, R., 1998. "Models of Remittances and Migration With or Without Cooperation," Papers 98-05, Wellesley College - Department of Economics.
  2. Morduch, Jonathan, 1995. "Income Smoothing and Consumption Smoothing," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 103-14, Summer. [Downloadable!] (restricted)
    Other versions:
  3. Tito Boeri & Christopher J. Flinn, . "Returns to Mobility in the Transition to a Market Economy," Working Papers 123, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
    Other versions:
  4. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  5. John S. Earle & Zuzana Sakova, 1999. "Entrepreneurship from Scratch: Lessons on the Entry Decision into Self-Employment from Transition Economies," IZA Discussion Papers 79, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-33, June. [Downloadable!] (restricted)
  7. Udry, Christopher, 1990. "Credit Markets in Northern Nigeria: Credit as Insurance in a Rural Economy," World Bank Economic Review, Oxford University Press, vol. 4(3), pages 251-69, September.
  8. Foley, M.C., 1997. "Labor Market Dynamics in Russia," Papers 780, Yale - Economic Growth Center.
  9. Dustmann, Christian & van Soest, Arthur, 1998. "Public and private sector wages of male workers in Germany," European Economic Review, Elsevier, vol. 42(8), pages 1417-1441, September. [Downloadable!] (restricted)
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  10. Shaw, Kathryn L, 1987. "The Quit Propensity of Married Men," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 533-60, October. [Downloadable!] (restricted)
  11. Meyer, Jack, 1987. "Two-moment Decision Models and Expected Utility Maximization," American Economic Review, American Economic Association, vol. 77(3), pages 421-30, June. [Downloadable!] (restricted)
  12. Lundberg, Shelly & Pollak, Robert A, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-58, Fall. [Downloadable!] (restricted)
  13. Mark C. Foley, 1997. "Labor Market Dynamics in Russia," Working Papers 780, Economic Growth Center, Yale University. [Downloadable!]
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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.)

  1. Steven Stillman, 2000. "The Determinants of Private and Government Sector Earnings in Russia," Working Papers 00-17, RAND Corporation Publications Department. [Downloadable!]
  2. Sònia Muñoz, 2006. "Wealth Effects in Europe: A Tale of Two Countries (Italy and the United Kingdom)," IMF Working Papers 06/30, International Monetary Fund. [Downloadable!]
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