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

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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File URL: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/dp0406.pdf
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Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 4/2006.

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Length: 31 pages
Date of creation: 13 Apr 2006
Date of revision:
Handle: RePEc:hhs:bofitp:2006_004
Contact details of provider: Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
Web page: http://www.suomenpankki.fi/bofit_en/
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  1. 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.
  2. Irina Slinko & Evgeny Yakovlev & Ekaterina Zhuravskaya, 2003. "Laws for Sale: Evidence from Russia," Working Papers w0031, Center for Economic and Financial Research (CEFIR).
  3. John S. Earle & J. David Brown, 2002. "The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants," Upjohn Working Papers and Journal Articles 02-83, W.E. Upjohn Institute for Employment Research.
  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).
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  10. 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.
  11. Burgess, Simon & Lane, Julia & Stevens, David, 2000. "Job Flows, Worker Flows, and Churning," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 473-502, July.
  12. Guido Friebel & Sergei Guriev, 2005. "Attaching Workers through In-Kind Payments: Theory and Evidence from Russia," Sciences Po publications info:hdl:2441/5q3gpbfo7i8, Sciences Po.
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  14. Paul Oyer, 2005. "Salary or Benefits?," NBER Working Papers 11817, National Bureau of Economic Research, Inc.
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  18. Sabirianova Klara, 2001. "The Great Human Capital Reallocation: A Study of Occupational Mobility in Transitional Russiah," EERC Working Paper Series 2k/11e, EERC Research Network, Russia and CIS.
  19. 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).
  20. William E. Even & David A. Macpherson, 1996. "Employer size and labor turnover: The role of pensions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(4), pages 707-728, July.
  21. Sonin, Konstantin, 2003. "Provincial Protectionism," CEPR Discussion Papers 3973, C.E.P.R. Discussion Papers.
  22. Simon Commander & Mark Schankerman, 1997. "Enterprise restructuring and social benefits," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(1), pages 1-24, 05.
  23. Atrostic, B K, 1982. "The Demand for Leisure and Nonpecuniary Job Characteristics," American Economic Review, American Economic Association, vol. 72(3), pages 428-40, June.
  24. 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.
  25. 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.
  26. Rein,Martin & Friedman,Barry L. & Wörgötter,Andreas (ed.), 1997. "Enterprise and Social Benefits after Communism," Cambridge Books, Cambridge University Press, number 9780521584036.
  27. Ariane Lambert-Mogiliansky & Konstantin Sonin & Ekaterina Zhuravskaya, 2003. "Capture of Bankruptcy: Theory and Russian Evidence," Working Papers w0038, Center for Economic and Financial Research (CEFIR).
  28. Dye, Ronald A & Antle, Rick, 1984. "Self-Selection via Fringe Benefits," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 388-411, July.
  29. 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.
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