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

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Author Info
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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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 547.

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

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Related research
Keywords: Russia Transition Job Search Wage Offer Function Hazard Rates

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Find related papers by JEL classification:
P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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  1. Constantin G. Ogloblin, 1999. "The Gender earnings differential in the Russian transition economy," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 52(4), pages 602-627, July.
  2. van Ours, Jan C., 2000. "Do Active Labor Market Policies Help Unemployed Workers to Find and Keep Regular Jobs?," IZA Discussion Papers 121, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. 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 114, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  4. 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. [Downloadable!] (restricted)
    Other versions:
  5. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  6. 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.
  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 Stephen M. Ross Business School. [Downloadable!]
  8. Susan J. Linz, 2002. "Motivating Russian Workers: Analysis of Age and Gender Differences," William Davidson Institute Working Papers Series 466, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  9. 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. [Downloadable!]
  10. Foley, M.C., 1997. "Labor Market Dynamics in Russia," Papers 780, Yale - Economic Growth Center.
  11. Grogan, Louise & Berg, Gerard J. van den, 1999. "The duration of unemployment in Russia," Serie Research Memoranda 0015, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics. [Downloadable!]
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  12. Ours, J.C. van, 2000. "Do active labor market policies help unemployed workers to find and keep regular jobs?," Discussion Paper 10, Tilburg University, Center for Economic Research. [Downloadable!]
  13. 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. [Downloadable!] (restricted)
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  14. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June. [Downloadable!] (restricted)
  15. 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. [Downloadable!] (restricted)
  16. Mark C. Foley, 1997. "Labor Market Dynamics in Russia," Working Papers 780, Economic Growth Center, Yale University. [Downloadable!]
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