Attaching Workers through In-Kind Payments: Theory and Evidence from Russia
Guido Friebel and
Sergei Guriev ()
World Bank Economic Review, 2005, vol. 19, issue 2, pages 175-202
External shocks may cause a decline in the productivity of fixed capital in certain regions of an economy. Exogenous obstacles to migration make it hard for workers in those regions to reallocate to more prosperous regions. In addition, firms may devise "attachment" strategies to keep workers from moving out of a local labor market. When workers are compensated in kind, they find it difficult to raise the cash needed for migration. This endogenous obstacle to migration has not yet been considered in the literature. The article shows that the feasibility of attachment depends on the inherited structure of local labor markets: attachment can exist in equilibrium only if the labor market is sufficiently concentrated. Attachment is beneficial for both employers and employees but hurts the unemployed and the self-employed. An analysis of matched household-firm data from the Russian Federation corroborates the theory. Copyright 2005, Oxford University Press.
References: Add references at CitEc
Citations View citations in EconPapers (8) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Working Paper: Attaching Workers Through In-kind Payments: Theory and Evidence from Russia (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:oup:wbecrv:v:19:y:2005:i:2:p:175-202
Ordering information: This journal article can be ordered from
Access Statistics for this article
World Bank Economic Review is currently edited by Jaime de Melo
More articles in World Bank Economic Review from World Bank Group
Address: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Contact information at EDIRC.
Series data maintained by Oxford University Press ().