Non-Wage Benefits, Costs of Turnover, and Labor Attachment: Evidence from Russian Firms

Bank of Finland Institute for Economies in Transition Working Paper No. 4/2006

31 Pages Posted: 19 Apr 2006

See all articles by Tuuli Juurikkala

Tuuli Juurikkala

Bank of Finland

Olga Lazareva

National Research University Higher School of Economics

Date Written: April 13, 2006

Abstract

Just as in established market economies, many Russian firms provide non-wage benefits such as housing, medical care or day care to their employees. Interpreting this as a strategic choice of firms in an imperfect labor market, this paper examines unique survey data for 404 large and medium-size industrial establishments from 40 Russian regions. We find strong evidence that Russian industrial firms use social services to reduce the costs of labor turnover in the face of tight labor markets. The strongest effect is observed for blue-collar workers. We also find that the share of non-monetary compensation decreases with improved access to local social services.

Keywords: non-wage benefits, labor turnover, labor attachment, Russia

JEL Classification: J32, J33, J42, J63, M52, P31

Suggested Citation

Juurikkala, Tuuli and Lazareva, Olga, Non-Wage Benefits, Costs of Turnover, and Labor Attachment: Evidence from Russian Firms (April 13, 2006). Bank of Finland Institute for Economies in Transition Working Paper No. 4/2006, Available at SSRN: https://ssrn.com/abstract=895266 or http://dx.doi.org/10.2139/ssrn.895266

Tuuli Juurikkala (Contact Author)

Bank of Finland ( email )

P.O. Box 160
FIN-00101 Helsinki
Finland

Olga Lazareva

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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