Replication Data for: Family Labor Supply and Wage Shocks in an Emerging Market: Evidence from Russia
Description
We estimate labor supply elasticities for men and women in Russia using a dynamic two-earner life-cycle model with wage shocks and intra-household consumption smoothing. A three-stage estimation procedure accounts for measurement error and distinguishes between permanent and transitory shocks. We find significant gender differences in wage volatility and labor supply responses. Intra-household insurance dominates individual responses, especially among low-income households. Labor supply is more elastic among high-income and highly educated individuals. The findings contribute to the labor supply literature in emerging markets and have implications for tax policy, suggesting that greater tax progressivity can enhance welfare with minimal efficiency losses. The project estimates Frisch and Marshallian own‑ and cross‑elasticities of labor supply for married couples in Russia, allowing for heterogeneity by: - Education level (higher vs. non‑higher for each spouse) - Household income (conditional moments) The estimation proceeds in three stages: 1. First‑stage regressions – partial out controls (age, education, region, year, children) from wage, consumption, earnings, and hours growth. 2. Wage process (stage 2) – GMM estimation of the joint stochastic process for male and female wages (permanent and transitory shocks). 3. Preferences (stage 3) – GMM estimation of labor supply elasticities using the estimated wage process as input. Bootstrap inference (household clustering) is used throughout.
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Institutions
- Gaidar Institute for Economic PolicyMoscow, Moscow