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Worker Training in a Restructuring Economy: Evidence from the Russian Transition

Author

Listed:
  • Berger, Mark C.

    (CBER, University of Kentucky)

  • Earle, John S.

    () (George Mason University)

  • Peter, Klara Sabirianova

    () (University of North Carolina, Chapel Hill)

Abstract

We use 1994-1998 data from the Russian Longitudinal Monitoring Survey (RLMS) to measure the incidence and determinants of several types of worker training and to estimate the effects of training on workers’ interindustry, interfirm, and occupational mobility, their labor force transitions, and their wage growth in Russia compared to the U.S. We hypothesize that the shock of economic liberalization in Russia may raise the benefits of training, particularly retraining for new jobs, but uncertainty concerning the revaluation of skills may raise the costs, with an overall ambiguous effect on the amount of training undertaken. The RLMS indicates a lower rate of formal training than studies have found for the U.S., suggesting that the second effect dominates. Previous schooling is estimated to affect the probability of training positively, but the relationship is much stronger for additional training in the same field than for retraining for new fields, consistent with the hypothesis that schooling and training are complementary but become more substitutable in a restructuring environment. Additional training in workers’ current fields is estimated to reduce mobility and earnings, suggesting inertial programs from the pre-transition era. Retraining in new fields increases all types of worker mobility and has higher returns than those typically observed for training in the U.S., but it also raises the variance of earnings and the probability of unemployment, consistent with a search view of such retraining. Given the large returns to retraining, the efforts of Russian workers to learn new skills may increase as uncertainty is resolved and restructuring proceeds.

Suggested Citation

  • Berger, Mark C. & Earle, John S. & Peter, Klara Sabirianova, 2001. "Worker Training in a Restructuring Economy: Evidence from the Russian Transition," IZA Discussion Papers 361, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp361
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    References listed on IDEAS

    as
    1. John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 661-707, July.
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    Cited by:

    1. Johnes, Geraint & Tanaka, Yasuhide, 2008. "Changes in gender wage discrimination in the 1990s: A tale of three very different economies," Japan and the World Economy, Elsevier, vol. 20(1), pages 97-113, January.
    2. 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.
    3. Borisov Gleb, 2005. "The human capital heterogeneity at the Russian labor market," EERC Working Paper Series 01-151e, EERC Research Network, Russia and CIS.
    4. Aistov, Andrey & Aleksandrova, Ekaterina, 2016. "Time-distributed difference-in-differences approach: The case of wage returns to training," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 43, pages 5-28.
    5. Andrey Aistov & Ekaterina Aleksandrova, 2015. "Individual Returns to Training in a Russian Firm," HSE Working papers WP BRP 101/EC/2015, National Research University Higher School of Economics.
    6. 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.
    7. Olga Lazareva, 2009. "Health Effects of Occupational Change," Working Papers w0129, Center for Economic and Financial Research (CEFIR).
    8. Travkin, Pavel, 2014. "The impact of the on-the-job training on Russian worker’s salary: The effect of abilities approach," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 51-70.

    More about this item

    Keywords

    restructuring; wage growth; human capital investments; On-the-job training;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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