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Re-employment Probabilities and Wage Offer Function for Russian Labor Market

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  • Natalia V. Smirnova

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Abstract

This research addresses labor market transformation in Russia. It elaborates on the theory of job search and focuses on the following issues: (1) evaluation of the re-employment probabilities (hazard rates) for different socio-economic groups; and (2) estimation of wage offer distribution for the transforming labor market. We use data from Phase II of the Russia Longitudinal Monitoring Survey (RLMS) to estimate the employment and wage offer functions for Russian workers who found a job after having been unemployed. We take into account the effectiveness of search strategies used and correct for truncation in wage offers. The binomial logit-OLS estimation method with sample selection bias correction on pooled data from Rounds 5-9 of RLMS is used. The factors considered are sex, education, experience, sector of employment and search methods’ success rate, which are hypothesized to capture the main determinants of job search behavior. The results show that individual characteristics, as well as the search method used, play a decisive role in the re-employment prospects of the unemployed. The private sector employment level is estimated to have the most powerful positive effect on the wage offer function. Russian women are less likely than men to find a job after being unemployed, and wage offers for women are estimated to be lower than for men.

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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 547.

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Length: 26 pages
Date of creation: 01 Feb 2003
Date of revision:
Handle: RePEc:wdi:papers:2003-547

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Keywords: Russia; Transition; Job Search; Wage Offer Function; Hazard Rates;

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References

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  1. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January.
  2. Linz, Susan J., 2004. "Motivating Russian workers: analysis of age and gender differences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(3), pages 261-289, July.
  3. Mark C. Foley, 1997. "Labor Market Dynamics in Russia," Working Papers 780, Economic Growth Center, Yale University.
  4. repec:dgr:uvatin:2099011 is not listed on IDEAS
  5. Louise Grogan & Gerard J. van den Berg, 1999. "The Duration of Unemployment in Russia," Tinbergen Institute Discussion Papers 99-011/3, Tinbergen Institute.
  6. Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers 2053, C.E.P.R. Discussion Papers.
  7. Maxim Bouev, 2001. "Labor Supply, Informal Economy and Russian Transition," William Davidson Institute Working Papers Series 408, William Davidson Institute at the University of Michigan.
  8. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  9. Foley, M.C., 1997. "Labor Market Dynamics in Russia," Papers 780, Yale - Economic Growth Center.
  10. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
  11. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
  12. Louise Grogan & Gerard J. van den Berg, 1999. "The Duration of Unemployment in Russia," Tinbergen Institute Discussion Papers 99-011/3, Tinbergen Institute.
  13. Swati Basu & Saul Estrin & Jan Svejnar, 2000. "Employment and Wages in Enterprises Under Communism and in Transition: Evidence From Central Europe and Russia," William Davidson Institute Working Papers Series 440, William Davidson Institute at the University of Michigan.
  14. Elena Glinskaya & Thomas A. Mroz, 2000. "The gender gap in wages in Russia from 1992 to 1995," Journal of Population Economics, Springer, vol. 13(2), pages 353-386.
  15. Jan C. van Ours, 2000. "Do Active Labor Market Policies Help Unemployed Workers to Find and Keep Regular Jobs?," William Davidson Institute Working Papers Series 289, William Davidson Institute at the University of Michigan.
  16. Constantin G. Ogloblin, 1999. "The Gender earnings differential in the Russian transition economy," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(4), pages 602-627, July.
  17. Ours, J.C. van, 2000. "Do Active Labor Market Policies help Unemployed Workers to find and keep Regular Jobs," Discussion Paper 2000-10, Tilburg University, Center for Economic Research.
  18. Narendranathan, Wiji & Nickell, Stephen, 1985. "Estimating the Parameters of Interest in a Job Search Model," The Warwick Economics Research Paper Series (TWERPS) 259, University of Warwick, Department of Economics.
  19. Ingo Geishecker & John P. Haisken-DeNew, 2002. "Riding the Transition Roller-Coaster: Flexibility and the Inter-Industry Wage Structure in Russia," Discussion Papers of DIW Berlin 280, DIW Berlin, German Institute for Economic Research.
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