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Labor Market Uncertainty and Private Sector Labor Supply in Russia

  • Steven Stillman

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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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp359.pdf
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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 359.

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Length: pages
Date of creation: 01 Nov 2000
Date of revision:
Handle: RePEc:wdi:papers:2000-359
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  1. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
  2. Mark C. Foley, 1997. "Labor Market Dynamics in Russia," Working Papers 780, Economic Growth Center, Yale University.
  3. Tito Boeri & Christopher Flinn, 1997. "Returns to Mobility in the transition to a Market Economy," William Davidson Institute Working Papers Series 108, William Davidson Institute at the University of Michigan.
  4. Peter Gottschalk & Robert Moffitt, 1994. "The Growth of Earnings Instability in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 217-272.
  5. Meyer, Jack, 1987. "Two-moment Decision Models and Expected Utility Maximization," American Economic Review, American Economic Association, vol. 77(3), pages 421-30, June.
  6. Udry, Christopher, 1990. "Credit Markets in Northern Nigeria: Credit as Insurance in a Rural Economy," World Bank Economic Review, World Bank Group, vol. 4(3), pages 251-69, September.
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  8. Shelly Lundberg & Robert A. Pollak, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-158, Fall.
  9. Dustmann, C. & van Soest, A., 1997. "Public and Private Sector Wages of Male Workers in Germany," Economics Working Papers eco97/13, European University Institute.
  10. Vladimir Gimpelson & Douglas Lippoldt, 1999. "Private sector employment in Russia: Scale, composition and performance," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 505-533, July.
  11. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  12. Foley, M.C., 1997. "Labor Market Dynamics in Russia," Papers 780, Yale - Economic Growth Center.
  13. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-33, June.
  14. Shaw, Kathryn L, 1987. "The Quit Propensity of Married Men," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 533-60, October.
  15. Chakrabarti, R., 1998. "Models of Remittances and Migration With or Without Cooperation," Papers 98-05, Wellesley College - Department of Economics.
  16. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
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