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Firm-paid vs. worker-paid on-the-job training in Russia: Determinants and returns

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  • Lazareva Olga

Abstract

In a restructuring economy on-the-job training plays important role not only in raising the general level of human capital but in retooling workers for the new sectors of economy. The amount of on-the-job training in Russia has however been unsatisfactorily low compared to other countries. Main objective of this paper is to study the incentives of firms and workers to invest into employee training in Russia. Utilizing the data from Russian Longitudinal Monitoring survey for years 1999–2003, we investigate the determinants of training financing with the particular emphasis on the role of labor market characteristics. We exploit heterogeneity in the structure of regional labor markets in Russia to investigate its effect on training outcomes. In line with existing theory, it is shown that imperfections of the labor market, such as higher regional labor market concentration, lower share of small businesses and higher unemployment create incentives for the firms to provide training to employees. Hence, increase in the efficiency of the labor market is likely to bring about further decrease in the amount of employee training in a private sector.

Suggested Citation

  • Lazareva Olga, 2006. "Firm-paid vs. worker-paid on-the-job training in Russia: Determinants and returns," EERC Working Paper Series 06-05e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:06-05e
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    References listed on IDEAS

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    2. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-171, January.
    3. J. David Brown & John S. Earle, 2003. "The reallocation of workers and jobs in Russian industry," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 221-252, June.
    4. Yuri Andrienko & Sergei Guriev, 2003. "Determinants of Interregional Mobility in Russia: Evidence from Panel Data," William Davidson Institute Working Papers Series 551, William Davidson Institute at the University of Michigan.
    5. Mark A. Loewenstein & James R. Spletzer, 1997. "Delayed Formal on-the-job Training," ILR Review, Cornell University, ILR School, vol. 51(1), pages 82-99, October.
    6. Mark C. Berger & John S. Earle & Klara Sabirianova, 2001. "Worker Training in a Restructuring Economy: Evidence from the Russian Transition," Book chapters authored by Upjohn Institute researchers, in: Soloman W. Polachek (ed.),Worker Wellbeing in a Changing Labor Market, pages 159-189, W.E. Upjohn Institute for Employment Research.
    7. Yuri Andrienko & Sergei Guriev, 2004. "Determinants of interregional mobility in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(1), pages 1-27, March.
    8. John M. Barron & Mark C. Berger & Dan A. Black, 1999. "Do Workers Pay for On-The-Job Training?," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 235-252.
    9. Jacob Mincer, 1962. "On-the-Job Training: Costs, Returns, and Some Implications," NBER Chapters, in: Investment in Human Beings, pages 50-79, National Bureau of Economic Research, Inc.
    10. J. David Brown & John S. Earle, "undated". "The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants," Upjohn Working Papers jse20031, W.E. Upjohn Institute for Employment Research.
    11. Greenhalgh, Christine, 1999. "Adult Vocational Training and Government Policy in France and Britain," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 15(1), pages 97-113, Spring.
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    Cited by:

    1. Pavel V. Travkin, 2014. "The Returns To Training In Russia: A Difference-In-Differences Analysis," HSE Working papers WP BRP 56/EC/2014, National Research University Higher School of Economics.
    2. Olga Kupets, 2018. "Employer‐provided training, innovation and skills in post‐Soviet countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(4), pages 725-768, October.
    3. Kupets, Olga, 2018. "Investment in human capital in post-Soviet countries: Why are firms not training more?," CEI Working Paper Series 2017-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    Keywords

    Russia; on-the-job training; labor market structure; returns to training.;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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