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Non-wage benefits, costs of turnover, and labor attachment: evidence from Russian firms

  • Tuuli Juurikkala


    (Bank of Finland Institute for Economies in Transition)

  • Olga Lazareva



Just as in established market economies, many Russian firms provide non-wage benefits such as housing, medical care or day care to their employees. Interpreting this as a strategic choice of firms in an imperfect labor market, this paper examines unique survey data for 404 large and medium-size industrial establishments from 40 Russian regions. We find strong evidence that Russian industrial firms use social services to reduce the costs of labor turnover in the face of tight labor markets. The strongest effect is observed for blue-collar workers. We also find that the share of non-monetary compensation decreases with improved access to local social services.

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Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0062.

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Length: 22 pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:cfr:cefirw:w0062
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  2. Berger, Mark C. & Blomquist, Glenn C. & Peter, Klara Sabirianova, 2003. "Compensating Differentials in Emerging Labor and Housing Markets: Estimates of Quality of Life in Russian Cities," IZA Discussion Papers 900, Institute for the Study of Labor (IZA).
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  9. Guido Friebel & Sergei Guriev, 2005. "Attaching Workers Through In-kind Payments: Theory and Evidence from Russia," Working Papers w0057, Center for Economic and Financial Research (CEFIR).
  10. Ekaterina Zhuravskaya, 2000. "Incentives to provide local public goods: fiscal federalism, Russian style," Working Papers w0001, Center for Economic and Financial Research (CEFIR).
  11. Sabirianova, Klara Z., 2002. "The Great Human Capital Reallocation: A Study of Occupational Mobility in Transitional Russia," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 191-217, March.
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  13. Alan L. Gustman & Olivia S. Mitchell & Thomas L. Steinmeier, 1993. "The Role of Pensions in the Labor Market," NBER Working Papers 4295, National Bureau of Economic Research, Inc.
  14. Woodbury, Stephen A & Hamermesh, Daniel S, 1992. "Taxes, Fringe Benefits and Faculty," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 287-96, May.
  15. Tuuli Juurikkala & Olga Lazareva, 2006. "Lobbying at the local level: social assets in Russian firms," Working Papers w0061, Center for Economic and Financial Research (CEFIR).
  16. Grosfeld, Irena & Senik-Leygonie, Claudia & Verdier, Thierry & Kolenikov, Stanislav & Paltseva, Elena, 2001. "Workers' Heterogeneity and Risk Aversion: A Segmentation Model of the Russian Labor Market," Journal of Comparative Economics, Elsevier, vol. 29(2), pages 230-256, June.
  17. Pertti Haaparanta & Tuuli Juurikkala & Olga Lazareva & Ekaterina Zhuravskaya & Jukka Pirttilä & Laura Solanko, 2004. "Firms and public service provision in Russia," Macroeconomics 0401015, EconWPA.
  18. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, June.
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  21. Paul Oyer, 2005. "Salary or Benefits?," NBER Working Papers 11817, National Bureau of Economic Research, Inc.
  22. Irina Slinko & Evgeny Yakovlev & Ekaterina Zhuravskaya, 2003. "Laws for Sale: Evidence from Russia," Working Papers w0031, Center for Economic and Financial Research (CEFIR).
  23. Alan L. Gustman & Thomas L. Steinmeier & Olivia Mitchell, 1994. "The role of pensions in the labor market: A survey of the literature," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(3), pages 417-438, April.
  24. Sonin, Konstantin, 2010. "Provincial protectionism," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 111-122, June.
  25. Richard A. Ippolito, 2002. "Stayers as "Workers" and "Savers": Toward Reconciling the Pension-Quit Literature," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 275-308.
  26. Anja Decressin & Julia Lane & Kristin McCue & Martha Stinson, 2005. "Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes," Longitudinal Employer-Household Dynamics Technical Papers 2005-01, Center for Economic Studies, U.S. Census Bureau.
  27. World Bank, 2003. "The Russian Labor Market : Moving from Crisis to Recovery," World Bank Publications, The World Bank, number 15007, March.
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