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Labor Market Uncertainty and Private Sector Labor Supply in Russia

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  • Steven 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.

Suggested Citation

  • Steven Stillman, 2000. "Labor Market Uncertainty and Private Sector Labor Supply in Russia," William Davidson Institute Working Papers Series 359, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2000-359
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    References listed on IDEAS

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    1. Dustmann, Christian & van Soest, Arthur, 1998. "Public and private sector wages of male workers in Germany," European Economic Review, Elsevier, vol. 42(8), pages 1417-1441, September.
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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. Sònia Muñoz, 2006. "Wealth Effects in Europe; A Tale of Two Countries (Italy and the United Kingdom)," IMF Working Papers 06/30, International Monetary Fund.

    More about this item

    Keywords

    Private sector; labor supply; Russia; uncertainty; intra-household;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • P36 - 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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