Backward Bends, Quantity Constraints, and Soviet Labor Supply: Evidence from the Soviet Interview Project

Abstract

This study makes two contributions to the quantity-constraint literature. First, it investigates the effects of consumer-market shortage on labor supply. Second, it considers the effects on hours of work of eliminating quantity constraints in a planned socialist economy. The estimated model of Soviet labor suppl y shows that the uncompensated wage elasticities of Soviet workers are negative and that workers facing quantity constraints react more strongly to wage increases than workers who do not face quantity constraints. The elimination of quantity constraints would, therefore, be expected to raise aggregate hours worked in the Soviet economy. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.