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Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation

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  • Grosfeld, Irena
  • Kolenikov, Stanislav
  • Paltseva, Elena
  • Sénik-Leygonie, Claudia
  • Verdier, Thierry

Abstract

This paper proposes an explanation of the puzzling coexistence of elements of inertia and dynamism on the Russian labour market using a segmentation model. Risk averse workers are differentiated according to their productivity. They face a trade-off between wages and access to social services provided by the firm. The most productive workers leave their initial firm, contract on the spot labour market, and concentrate in the best performing firms. The model provides a possible interpretation of wage arrears which can be viewed as an element of an implicit contract between firms and less productive workers. We test some of the predictions of the model using a panel dataset containing 13 410 firms, for 1993 - 1997.

Suggested Citation

  • Grosfeld, Irena & Kolenikov, Stanislav & Paltseva, Elena & Sénik-Leygonie, Claudia & Verdier, Thierry, 1999. "Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation," CEPR Discussion Papers 2224, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2224
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    Cited by:

    1. Pertti Haaparanta & Tuuli Juurikkala & Olga Lazareva & Jukka Pirttila & Laura Solanko & Ekaterina Zhuravskaya, 2003. "Firms And Public Service Provision In Russia," Working Papers w0041, Center for Economic and Financial Research (CEFIR).
    2. Jarkko Turunen, 2004. "Leaving state sector employment in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(1), pages 129-152, March.
    3. Guido Friebel & Sergei Guriev, 2000. "Should I Stay or Can I Go? Worker Attachment in Russia," Working Papers w0008, Center for Economic and Financial Research (CEFIR).
    4. Pertti Haaparanta & Tuuli Juurikkala & Olga Lazareva & Jukka Pirttila & Laura Solanko & Ekaterina Zhuravskaya, 2003. "Firms And Public Service Provision In Russia," Working Papers w0041, Center for Economic and Financial Research (CEFIR).
    5. Guido Friebel & Sergei Guriev, 2005. "Attaching Workers through In-Kind Payments: Theory and Evidence from Russia," The World Bank Economic Review, World Bank, vol. 19(2), pages 175-202.
    6. Ariane Lambert-Mogiliansky & Konstantin Sonin & Ekaterina Zhuravskaya, 2003. "Capture of Bankruptcy: Theory and Russian Evidence," Working Papers w0038, New Economic School (NES).
    7. Smirnych, Larissa & Woergoetter, Andreas, 2000. "Einkommen, Geschlecht und Arbeitsplatzwechsel in Russland 1998. Earnings, Gender, and Mobility in the RF 1995-1998," Transition Economics Series 15, Institute for Advanced Studies.
    8. Guido Friebel & Sergei Guriev, 1999. "Why Russian Workers Do Not Move: Attachment of Workers Through In-Kind Payments," William Davidson Institute Working Papers Series 283, William Davidson Institute at the University of Michigan.
    9. Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland Institute for Emerging Economies (BOFIT).

    More about this item

    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J00 - Labor and Demographic Economics - - General - - - General
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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