Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation

Posted: 12 Oct 1999

See all articles by Irena Grosfeld

Irena Grosfeld

Paris School of Economics

Claudia Senik

National Center for Scientific Research - Department and Laboratory of Applied and Theoretical Economics (DELTA); Universite Paris IV Sorbonne; IZA Institute of Labor Economics

Thierry Verdier

Paris School of Economics (PSE); Delta - Ecole Normale Superieure (ENS); Centre for Economic Policy Research (CEPR)

Stanislav Kolenikov

University of North Carolina at Chapel Hill - Department of Statistics

Elena Paltseva

Stockholm Institute of Transition Economics (SITE); New Economic School (NES)

Date Written: May 1999

Abstract

This paper proposes an explanation of the puzzling coexistence of elements of inertia and dynamism on the Russian labour market using a segmentation model. Risk adverse workers are differentiated according to their productivity. They face a trade-off between wages and access to social services provided by the firm. The most productive workers leave their initial firm, contract on the spot labour market, and concentrate in the best performing firms. The model provides a possible interpretation of wage arrears which can be viewed as an element of an implicit contract between firms and less productive workers. We test some of the predictions of the model using a panel dataset containing 13,410 firms for 1993 - 1997.

JEL Classification: J21, J23

Suggested Citation

Grosfeld, Irena and Senik, Claudia and Verdier, Thierry and Kolenikov, Stanislav and Paltseva, Elena, Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation (May 1999). Available at SSRN: https://ssrn.com/abstract=185408

Irena Grosfeld (Contact Author)

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014
France

Claudia Senik

National Center for Scientific Research - Department and Laboratory of Applied and Theoretical Economics (DELTA) ( email )

ENS, 48, bd Jourdan
75014 Paris
France
+33 1 4313 6312 (Phone)

Universite Paris IV Sorbonne

Department of Economics
75230 Paris Cedex 05
France
01 43 13 63 12 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Thierry Verdier

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014
France

Delta - Ecole Normale Superieure (ENS) ( email )

48, Boulevard Jourdan
75014 Paris
France
+33 1 4313 6308 (Phone)
+33 1 4313 6310 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Stanislav Kolenikov

University of North Carolina at Chapel Hill - Department of Statistics ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Elena Paltseva

Stockholm Institute of Transition Economics (SITE) ( email )

P.O. Box 6501
S-113 83 Stockholm, 11383
Sweden

New Economic School (NES) ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

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