Work detail

Estimation Elasticities of Labor Supply for SMEs. The case study of Belarus

Author: Mgr. Aliona Krauchenia
Year: 2012 - summer
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Work type: Masters
MEF
Language: English
Pages: 60
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Link:
Abstract: This Master thesis tests the intertemporal substitution hypothesis (ISH) for
Belarusian small and medium enterprises. The hypothesis predicts a positive
relationship between hours worked and transitory changes in wages. We tested
this prediction using the data on daily income and worked hours collected via
survey of entrepreneurs in Belarus, whose wages constant within days and un-
correlated across days. The estimated wage elastisities are small and negative,
what rejects the ISH. We interpret this result by \one-day targeting hypoth-
esis". We also argue the reasons why entrepreneurs have very short planning
horizon could be explained unstable business environment in the country. With
this aim we provide analysis of the business environment in Belarus and eco-
nomic development of the SMEs sector in general.
Downloadable: DT Krauchenia

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