Labor Market Discrimination During Post-Communist Transition: A Monopsony Approach to the Status of Latvia's Russian Minority
Conventional wisdom suggests that during communism, tastes for discrimination were suppressed. In partial explanation for ethnic tensions observed following central planning, economic liberalization allows those tastes to be expressed. This paper explores the feasibility of monopsony as an economic structure supportive of discrimination during transition, using Latvia's ethnic Russians as a case study. Measuring employment concentration and earnings differentials across regions, monopsony appears prevalent in the country. A monopsony explanation requires Russians to have lower labor supply elasticity than Latvians, a condition which estimates for participation probability confirm. Earnings decompositions show that though Russians are paid more than Latvians on average, given their human capital characteristics, they suffer earnings discrimination of between 5.5 and 7.3 percent. In addition, compared with Latvians the likelihood that Russians will be unemployed is greater, though Russians are less likely to register for unemployment services. This evidence suggests that lack of integrated, flexible labor markets in Latvia, and the monopsony which results, have supported labor market discrimination against Russians during transition.
|Date of creation:||01 Aug 2001|
|Date of revision:|
|Contact details of provider:|| Postal: 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109|
Phone: 734 763-5020
Fax: 734 763-5850
Web page: http://www.wdi.umich.edu
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Van Kolpin & Larry Singell Jr., 1997. "Asymmetric information, strategic behavior, and discrimination in the labor market," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(1), pages 175-184.
- John P. Haisken-DeNew & Christoph M. Schmidt, 2000.
"Interindustry and Interregion Differentials: Mechanics and Interpretation,"
The Review of Economics and Statistics,
MIT Press, vol. 79(3), pages 516-521, August.
- John P. Haisken-DeNew & Christoph M. Schmidt, . "Inter-Industry and Inter-Region Differentials: Mechanics and Interpretation," Working Papers 9504, SELAPO Center for Human Resources.
- Tomasz Mickiewicz, 1998. "Dismantling the state sector in Eastern Europe: Implications for unemployment," Post-Communist Economies, Taylor & Francis Journals, vol. 10(1), pages 47-62.
- Gottfries, N. & McCormick, B., 1993.
"Discrimination and open unemployment in a segmented labour market,"
Discussion Paper Series In Economics And Econometrics
9320, Economics Division, School of Social Sciences, University of Southampton.
- Gottfries, Nils & McCormick, Barry, 1995. "Discrimination and open unemployment in a segmented labour market," European Economic Review, Elsevier, vol. 39(1), pages 1-15, January.
- Gottfries, N. & Mccormick, B., 1990. "Discrimination And Open Unemployment In A Segmented Labour Market," Papers 460, Stockholm - International Economic Studies.
- Ham, John C & Svejnar, Jan & Terrell, Katherine, 1998.
"Unemployment and the Social Safety Net during Transitions to a Market Economy: Evidence from the Czech and Slovak Republics,"
American Economic Review,
American Economic Association, vol. 88(5), pages 1117-42, December.
- John Ham & Jan Svejnar & Katherine Terrell, 1998. "Unemployment and the Social Safety Net During Transitions to a Market Economy: Evidence from the Czech and Slovak Republic," William Davidson Institute Working Papers Series 169, William Davidson Institute at the University of Michigan.
- Price V. Fishback, 1998. "Operations of "Unfettered" Labor Markets: Exit and Voice in American Labor Markets at the Turn of the Century," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 722-765, June.
- Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
- Charles Kroncke & Kenneth Smith, 1999. "The wage effects of ethnicity in Estonia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 179-199, March.
- Brainerd, Elizabeth, 1998. "Winners and Losers in Russia's Economic Transition," American Economic Review, American Economic Association, vol. 88(5), pages 1094-1116, December.
- Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May.
- Marek GÕra & Christoph M. Schmidt, 1998.
"Long-term unemployment, unemployment benefits and social assistance: The Polish experience,"
Springer, vol. 23(1/2), pages 55-85.
- Marek Gora and Christoph M. Schmidt & Marek Gora and Christoph M. Schmidt, 1997. "Long-Term Unemployment, Unemployment Benefits and Social Assistance: The Polish Experience," William Davidson Institute Working Papers Series 110, William Davidson Institute at the University of Michigan.
- Robert S. Chase, 1998. "Markets for Communist Human Capital: Returns to Education and Experience in the Czech Republic and Slovakia," ILR Review, Cornell University, ILR School, vol. 51(3), pages 401-423, April.
- Ransom, Michael R, 1993. "Seniority and Monopsony in the Academic Labor Market," American Economic Review, American Economic Association, vol. 83(1), pages 221-33, March.
- Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
When requesting a correction, please mention this item's handle: RePEc:wdi:papers:2001-381. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laurie Gendron)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.