nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2007‒09‒09
five papers chosen by
Anna Y. Borodina
Perm State University

  1. An empirical note on growth and convergence across Russian regions By Solanko, Laura
  2. Firms and public service provision in Russia By Haaparanta, Pertti; Juurikkala, Tuuli; Lazareva, Olga; Pirttilä, Jukka; Solanko, Laura; Zhuravskaya , Ekaterina
  3. Job search behavior of unemployed in Russia By Smirnova , Natalia V.
  4. Wage determination and wage inequality inside a Russian firm in late transition: Evidence from personnel data - 1997 to 2002 By Thomas Dohmen; Hartmut Lehmann; Mark E. Schaffer
  5. Managing risks: what Russian households do to smooth consumption? By Notten, Geranda; de Neubourg, Chris

  1. By: Solanko, Laura (BOFIT)
    Abstract: This empirical note uses publicly available Goskomstat data to investigate income growth and convergence across Russian regions. Using data for 1992-2001, we find strong sigma divergence simultaneously with beta convergence. he results indicate that per capita income in Russian regions may be converging towards two separate steady states. The poorest regions seem to be converging among themselves, while growth experiences among other regions have been highly heterogeneous.
    Keywords: convergence; divergence; Russia; regions; growth
    Date: 2007–09–06
  2. By: Haaparanta, Pertti (BOFIT); Juurikkala, Tuuli (BOFIT); Lazareva, Olga (BOFIT); Pirttilä, Jukka (BOFIT); Solanko, Laura (BOFIT); Zhuravskaya , Ekaterina (BOFIT)
    Abstract: This paper reports first results from a survey of 404 middle-sized and large manufacturing firms from 40 Russian regions in April-June 2003. We examine the extent of social service and infrastructure provision by the firms and the firms’ assessment of the quality of public infrastructure and the regulatory environment. Background information of ownership, investment, performance, competition, and finance decisions of the firms is also gathered. <p> The data reveal that despite major divestments of social services during 1990s, a great majority of firms still provide at least some form of social services. For example, 56% of the firms have their own housing or support local housing, and 73% of the firms have recreation facilities or support employee’s recreation activities. While managers view the social service provision as non-essential and costly, many of the firms continue to provide these services, even to users other than their own workforce. <p> The quality of public infrastructure is generally assessed as being good or satisfactory; the respondents were the least satisfied with the quality of roads. Over a half of the firms provide their own heat, but mainly due to technological reasons – although public service interruptions do occur – and 24% of the firms give support to the maintenance and construction of public road network. <p> The regulatory burden the firms face continues to be severe. In more than half of the firms, for example, the general manager has to spend more than two weeks in negotiations about public infrastructure with the authorities. <p> These descriptive results indicate that there is still a lot scope for improvement in the quality and quantity of public service provision in Russia. Enterprises are still engaged rather heavily in social service provision, road network would require improvements, and the easing of regulatory burden should continue. Addressing these questions is likely to be vital for the sustainability of investments and growth in Russia. <p> The paper is part of the project “Infrastructure and Welfare Services in Russia: Enterprises as Beneficiaries and Service Providers” financed by the Academy of Finland (project number 200936), the World Bank, and Yrjö Jahnsson Foundation. The project has also received support from the Bank of Finland Institute for Economies in Transition.
    Date: 2007–09–06
  3. By: Smirnova , Natalia V. (BOFIT)
    Abstract: This paper explores the determinants of job search behavior, search intensity and choices of search methods of the unemployed workers in transitional Russia. We use pooled data from rounds 5-9 of the Russia Longitudinal Monitoring Survey (RLMS) to estimate the effects of socio-economic factors on the choices workers make while looking for a job. The results show that women are significantly less likely than men to engage in job searches, lag significantly behind men in search intensity, and significantly differ from men in their search strategies. The job search behavior of workers living in metropolitan areas of Moscow and St. Petersburg differs substantially from the behavior of workers living elsewhere in Russia. The most frequently used search strategy in Russia, as in other countries, is contacting friends and relatives for job leads.
    Keywords: Russia; transition; job search; search intensity; iogit
    JEL: J64 P23
    Date: 2007–09–06
  4. By: Thomas Dohmen; Hartmut Lehmann; Mark E. Schaffer
    Abstract: We use personnel data from a Russian firm for the years 1997 to 2002 to study the determinants of wages during transition. Our findings indicate that remuneration is not predetermined by formal rules and a stable institutionalized structure of wages, but rather that local labor market conditions have a strong impact on wage setting at the firm level. In particular, we document that real wages fall substantially during a period of high inflation and worsening local labor market conditions. Relative wage decreases are most pronounced for employees who initially earned the highest rents. The process of rent extraction leads to a strong compression of real wages and real compensation at the firm.
    Keywords: personnel economics, wage determination, Russia, transition
    JEL: J31 P31
    Date: 2007
  5. By: Notten, Geranda; de Neubourg, Chris
    Abstract: The increasing availability of rich (panel) data provides many opportunities to test theories on consumption smoothing behaviour. At the same time, the informational requirements in terms of data and modelling are high and very context specific, thus requiring a filtering of essential explanatory ingredients. In this paper we show how conceptual and exploratory empirical analysis can contribute to this filtering process. We develop a conceptual framework to analyze possible smoothing arrangements of households distinguishing between various smoothing mechanisms, institutional smoothing partners and required assets. Subsequently, we apply this framework to Russian survey data to explore how Russian households may smooth consumption. We select and analyze a broad set of indicators from household survey data to study what actions Russian households take and how these actions reflect the existence and prevalence of particular smoothing channels. The results can be used to formulate hypotheses on household smoothing behaviour and to delineate the features of a more rigorous analysis. The picture that emerges is one in which financial markets play a limited role as a smoothing channel in Russia, regardless of the smoothing mechanism used (saving, lending, insurance). Instead, households seem to use internal strategies, their family, social networks and the state to smooth consumption through capital accumulation, gift giving, the provision of loans and (pension) benefits. Furthermore, we find some evidence that old age pensions may be used for intergenerational risk-sharing within families while other findings point towards the use of household food production as an income smoothing strategy as opposed to a shock-response strategy.
    Keywords: Keywords: consumption smoothing; poverty; social risk management; Russia
    JEL: H55 D31 D12 D13 H53
    Date: 2007–08

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