Compensating Differentials in Emerging Labor and Housing Markets: Estimates of Quality of Life in Russian Cities

The existence of compensating differentials in Russian labor and housing markets is examined using data from the Russian Longitudinal Monitoring Survey (RLMS) augmented by city and regional-specific characteristics from other sources. While Russia is undergoing transition to a market economy, we find ample evidence that compensating differentials for location-specific amenities exist in the labor and housing markets. Our estimated wage and housing value equations suggest that workers are compensated for differences in climate, environmental conditions, ethnic conflicts, crime rates, and health conditions, after controlling for worker characteristics, occupation, industry, and economic conditions, and various housing characteristics. Moreover, we find evidence that these compensating differentials exist even after controlling for the regional pay differences (“regional coefficients”) used by the Russian government to compensate workers for living in regions that are designated as less desirable. We rank 953 Russian cities by quality of life as measured by a group of eleven amenities. Sizable variation in the estimated quality of life across cities exists. The highest ranked cities tend to be in relatively warm areas and areas in the western, European part of the country. In addition, our quality of life index is positively correlated with net migration into a region, suggesting workers are attracted to amenity-rich locations. Overall, we find that sufficient market equilibrium exists and a model of compensating differentials with controls for disequilibrium yields useful information about values of location-specific amenities and quality of life in this large transition economy.http://deepblue.lib.umich.edu/bitstream/2027.42/40006/2/wp620.pd

Worker Training in a Restructuring Economy: Evidence from the Russian Transition

We use 1994-1998 data from the Russian Longitudinal Monitoring Survey (RLMS) to measure the incidence and determinants of several types of worker training and to estimate the effects of training on workers' interindustry, interfirm, and occupational mobility, their labor force transitions, and their wage growth in Russia compared to the U.S. We hypothesize that the shock of economic liberalization in Russia may raise the benefits of training, particularly retraining for new jobs, but uncertainty concerning the revaluation of skills may raise the costs, with an overall ambiguous effect on the amount of training undertaken. The RLMS indicates a lower rate of formal training than studies have found for the U.S., suggesting that the second effect dominates. Previous schooling is estimated to affect the probability of training positively, but the relationship is much stronger for additional training in the same field than for retraining for new fields, consistent with the hypothesis that schooling and training are complementary but become more substitutable in a restructuring environment. Foreign ownership of the firm also positively affects the probability of undertaking training, providing evidence of active restructuring by foreigner investors. Additional training in workers' current fields is estimated to reduce mobility and earnings, suggesting inertial programs from the pre-transition era. Retraining in new fields increases all types of worker mobility and has higher returns than those typically observed for training in the U.S., but it also raises the variance of earnings and the probability of employment, consistent with a search view of such retraining. Given the large returns to retraining, the efforts of Russian workers to learn new skills may increase as uncertainty is resolved and restructuring proceeds.http://deepblue.lib.umich.edu/bitstream/2027.42/39715/3/wp331.pd

Worker Training in a Restructuring Economy: Evidence from the Russian Transition

We use 1994-1998 data from the Russian Longitudinal Monitoring Survey (RLMS) to measure the incidence and determinants of several types of worker training and to estimate the effects of training on workers' interindustry, interfirm, and occupational mobility, their labor force transitions, and their wage growth in Russia compared to the U.S. We hypothesize that the shock of economic liberalization in Russia may raise the benefits of training, particularly retraining for new jobs, but uncertainty concerning the revaluation of skills may raise the costs, with an overall ambiguous effect on the amount of training undertaken. The RLMS indicates a lower rate of formal training than studies have found for the U.S., suggesting that the second effect dominates. Previous schooling is estimated to affect the probability of training positively, but the relationship is much stronger for additional training in the same field than for retraining for new fields, consistent with the hypothesis that schooling and training are complementary but become more substitutable in a restructuring environment. Foreign ownership of the firm also positively affects the probability of undertaking training, providing evidence of active restructuring by foreigner investors. Additional training in workers' current fields is estimated to reduce mobility and earnings, suggesting inertial programs from the pre-transition era. Retraining in new fields increases all types of worker mobility and has higher returns than those typically observed for training in the U.S., but it also raises the variance of earnings and the probability of employment, consistent with a search view of such retraining. Given the large returns to retraining, the efforts of Russian workers to learn new skills may increase as uncertainty is resolved and restructuring proceeds.training, retraining, on-the-job training, mobility, labor market, transition

Measuring Underemployment at the County Level

As labor markets tightened in the last half of the nineties, economic development and community leaders sought to identify more locally available workers than were indicated by published statistics. Using results from commissioned surveys, they pointed to large numbers of part-time workers who desired full-time work, and to full-time workers who were qualified for better jobs. These statistics were often used to negate low official unemployment rates that deterred firms, concerned by the ostensible shortage of workers, from locating in their counties. We have conducted a larger, statewide, survey of underemployment and linked it to the detailed demographic and labor force data from the 2000 Census. We used the results to identify variations in the number and type of underemployed persons around the state, with emphasis on the differences between urbanized and rural areas. Over a quarter of full-time workers reported underemployment, including a third of workers in exurban counties. However, forty to fifty percent of underemployment is reportedly by choice, with the highest rates in the small urban and exurban regions. Of those that are not underemployed by choice, over ninety percent of respondents in some regions cited lack of job opportunities. We find that between fourteen and forty percent of part-time workers prefer full-time work, with the highest rates in rural Appalachian counties. We provide some of the reasons underemployed people cite as constraints to better employment. Also, we used the survey results and the recent Census information to predict the number and type of underemployed persons in each county. The model can be used to update predictions as new local demographic and labor force estimates are released annually from the Census Bureau’s forthcoming American Community Surveys

On-the-Job Training

Firms in the U.S. invest billions of dollars annually in workforce training. Growing evidence of the effects of this training on worker productivity, wages, hiring and turnover has led researchers to gradually incorporate the role of training into their analyses. Barron, Berger and Black advance this line of research by offering new evidence on the amount of training provided to workers during the first three months on the job, and the characteristics of those workers who received that training.https://research.upjohn.org/up_press/1070/thumbnail.jp