Paths to Success

Abstract

:Since the collapse of state socialism, self-employment has become a path to relative material success in Russia. Fifteen hypotheses regarding the effects of individual and regional characteristics on the hazard rate of entry to self-employment among Russians are tested using 3,356 work/activity histories spanning 1991–97 from the Survey of Employment, income, and Attitudes in Russia. Descriptive results confirm that the self-employed are better off materially and more supportive of market reforms than any other occupational class in contemporary Russia. Among the self-employed, those with employees rank higher on these criteria. Continuous-time hazard models reveal that some determinants of entry to self-employment observed in developed capitalist societies–human capital, gender, and labor market position–operate in a similar fashion in Russia, although the effect of human capital is essentially linear and the effect of sex has not diminished over time. Other variables-age and family background-operate differently in Russia. Communist Party affiliation originally facilitated becoming self-employed, but the effect diminished and even changed sign by the mid-1990s. Measures of regional economic performance and the effectiveness of law enforcement have fairly predictable effects, while regional economic policies have little or no net influence on rates of entry to self employment. The findings reflect the hybrid character of Russian economic institutions and culture during the period of market transition.

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