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Labor Market Uncertainty and Private Sector Labor Supply in Russia
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.
Citation
Stillman, Steven. 2000. “Labor Market Uncertainty and Private Sector Labor Supply in Russia,” William Davidson Institute Working Paper 359.
Motu code: MYS0019
JEL codes: J23, P36, C35, D10