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Complementarity And Custom In Wage Contract Violation, John S. Earle, Klara Sabirianova Peter
Complementarity And Custom In Wage Contract Violation, John S. Earle, Klara Sabirianova Peter
Upjohn Institute Working Papers
We analyze a model of wage delay in which strategic complementarity arises because each employer's costs of violating its contracts decrease with the arrears in its labor market. The model is estimated on panel data for workers and firms in Russia, facilitating identification through fixed effects for employees, employers, and local labor markets, and instrumental variables based on policy interventions. The estimated reaction function displays strongly positive neighborhood effects, and the estimated feedback loops - worker quits, effort, strikes, and legal penalties - imply that costs of wage delays are attenuated by neighborhood arrears. We also study a nonlinear case …
Wages, Layoffs, And Privatization: Evidence From Ukraine, J. David Brown, John S. Earle, Volodymyr Vakhitov
Wages, Layoffs, And Privatization: Evidence From Ukraine, J. David Brown, John S. Earle, Volodymyr Vakhitov
Upjohn Institute Working Papers
This paper estimates the effects of privatization on worker separations and wages using retrospective data from a national probability sample of Ukrainian households. Detailed worker characteristics are used to control for compositional differences and to assess types of observable "winners" and "losers" from privatization. Preprivatization worker-firm matches are used to control for unobservables in worker and firm selection. The results imply that privatization reduces wages by 5 percent and cuts the layoff probability in half. Outside investor ownership reduces separations but leaves wages unaffected. Winners from privatization tend to be higher-skilled employees of larger firms, but there is no discernible …