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Labor Market Uncertainty and Private Sector Labor Supply in Russia

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  • Steve Stillman

Abstract

The development of a vibrant private sector has been one of the key failures of the transitional period in Russia. This paper develops a theoretical and empirical model of individual labor supply behavior under uncertainty, and estimates this model using data from the Russian Longitudinal Monitoring Survey for the years 1994 - 1996 & 1998. As hypothesized, a decrease in private sector earnings variability is estimated to increase the likelihood of private sector employment for individuals with constrained consumption smoothing ability. Evidence of ex-ante intra-household risk sharing is also found with individuals reducing their exposure to uncertainty by diversifying the portfolio of jobs held by their household.
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Suggested Citation

  • Steve Stillman, 2000. "Labor Market Uncertainty and Private Sector Labor Supply in Russia," Working Papers DRU-2393-NICHD, RAND Corporation.
    • Handle: RePEc:ran:wpaper:dru-2393-nichd
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    References listed on IDEAS

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    Cited by:

    1. Steven Stillman, 2000. "The Determinants of Private and Government Sector Earnings in Russia," Working Papers 00-17, RAND Corporation.
    2. Ms. Sònia Muñoz, 2006. "Wealth Effects in Europe: A Tale of Two Countries (Italy and the United Kingdom)," IMF Working Papers 2006/030, International Monetary Fund.
    3. Emmanuel Skoufias, 2003. "Consumption smoothing in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(1), pages 67-91, March.

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    More about this item

    Keywords

    private sector; labor supply; Russia; uncertainty; intra-household;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D10 - Microeconomics - - Household Behavior - - - General

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