Exit and Voice Dynamics: An empirical study of the Soviet labour market, 1940-1960s Martin Kragh 1 Dissertation for the Degree of Doctor ofPhilosophy, Ph.D. Stockholm School of Economics, 2009. Keywords Russia, Soviet Union, USSR, labour market, labour history, economic history, coercion, compliance, command economy, Stalinism, Stalin, Khrushchev, Brezhnev, Hirschman, Exit, Voice, Loyalty, negotiation Exit and V oice Dynamics: An empirical study of the Soviet labour market, 1940-1960s Martin Kragh Akademisk avhandling Som för avläggande av ekonornie doktorsexamen vid Handelshögskolan i Stockholm framläggs för offentlig granskning fredagen den 4 december 2009 kl. 13-15 i sal 750, Handelshögskolan, Sveavägen 65, Stockholm Table of Contents Aclatowledgements ............................................................................................................... 3 I..ist of Tables ........................................................................................................................ 5 List of Diagrams ................................................................................................................... 7 Abbreviations, Acronyms, and Technical Terms ................................................................. 9 r;,,. C hap ter 1. Introduction and Purpose of the Study ............................................................. 11 1.1 Purpose of the Study ...................................................................................................... 12 Chapter 2. Historical Background and Previous Research ................................................ 15 2.1 The Soviet Structure of Command ................................................................................. 15 2.2 Economic Development ................................................................................................. 18 2.3 W ork and Labour Discipline .......................................................................................... 28 2.4 The Suppression of Protest and its Economic Outcome ................................................ 32 2.5 Concluding Remarks ...................................................................................................... 35 2.6 Primary Sources ............................................................................................................. 36 Chapter 3. Labour Market Theory ...................................................................................... 41 3 .l Detining the Concepts of Exit, Voice and Loyalty ........................................................ 41 3.2 The Fair Wage Mode1 and Birschman in a Labour Market Context ............................. 43 3.3 Concluding Remarks ...................................................................................................... 45 Chapter 4. Labour Coercion, 1940-1956 .............................................................................. 47 4.1 Illegal Job-Changing and Absenteeism: The Edict of June 26, 1940 ............................ 49 4.1.1 Legal Practice and Administrative Resistance ........................................................ 52 4.2 Desertion: The Edict ofDecember 26, 1941 .................................................................. 58 ·~· 4.2.1 The War Economy .................................................................................................. 59 4.2.2 The Combat against Desertion ................................................................................ 61 4.2.3 Administrative Congestion ...................................................................................... 63 4.2.4 Administrative and Managerial Non-Compliance .................................................. 64 4.2.5 Economic and Social F actors .................................................................................. 65 4.2.6 Reactions ................................................................................................................. 68 4.2. 7 Sentences and Practice of the Edict on Desertion ................................................... 70 4.3 Conc1uding Remarks ...................................................................................................... 74 4.3.1 Efficiency of Labour Coercion ................................................................................ 74 4.3.2 Labour Coercion in Practice: Theory and Evidence ............................................... 76 4.3.3 Conclusion ............................................................................................................... 79 Chapter 5. Khrushchev's Reforms and the Soviet Enterprise ............................................ 83 5.1 Re-organizing the lndustrial Landscape: Khrushchev's Dietum ................................... 84 5.2 The W ag e and W orkday Reforms .................................................................................. 87 5.3 The Soviet Enterprise ..................................................................................................... 92 5.3 .l Orgnabor - Organized Recruitment ........................................................................ 96 5.4 Exit, Voice and Economic Crime ................................................................................... 98 5.4.1 Economic Crime and Informa1 Collusion ............................................................. 102 5.5 Conc1uding Remarks .................................................................................................... 105 Chapter 6. Exit ................................................................................................................... 111 6.1 Definitions .................................................................................................................... ll3 6.2 Labour Tumover .......................................................................................................... 114 6.3 Economic Structure: Work Conditions and Recruitment.. ........................................... 125 6.3.1 Structura1 Demand and Heterogeneous Labour ........................................................ 129 6.5 Driving Forces of Labour Tumover ............................................................................. 135 6.6 Concluding Remarks .................................................................................................... 142 Chapter 7. Voice ................................................................................................................ 149 7 .l Absenteeism ................................................................................................................. 151 7.2 Creating Loyalty ........................................................................................................... 155 7.3 Three Aspeets ofVoiee: Walk-Outs, Strikes and Dissent ........................................... 161 7.3.1 Walk-outs and strikes ............................................................................................ 161 7.3 .2 Dissent and Repression: A Comment.. .................................................................. 164 7.4 Spoilage ........................................................................................................................ 166 7.5 Losses of labour time ................................................................................................... 168 7.5.1 Losses of Labour Time in Perspeetive .................................................................. 174 7.6 Soeialization and Soviet Life ....................................................................................... 178 7. 7 Overtime Work ............................................................................................................. 183 7.8 Coneluding Remarks .............................................. ~ ..................................................... 185 Chapter 8. Concluding Remarks ...............................••.........................•........................... 189 8.1 Summary of Chapter 4 ................................................................................................. 190 8.2 Summary of Chapter 5 ................................................................................................. 191 8.3 Summary ofChapter 6 ................................................................................................. 192 8.4 Summary ofChapter 7 ................................................................................................. 193 8.5 Summary Diseussion .................................................................................................... 195 Chapter 9. I.ist of References ............................................................................................ 199 · 9.1 Arehivat Colleetions ..................................................................................................... 199 9.2 Doeumentary, Legal and Statistieal Publieations and Arehivat Guides ....................... 199 9.3 Russian Seeondary Literature ....................................................................................... 200 8.3 Non-Russian Seeondary Literature .............................................................................. 203 8.4 Journal Articles, Artides in Books and Working Papers ............................................. 213 8.5 Unpublished Referenees and Dissertations .................................................................. 221 C hap ter 10. Appendices ..................................................•...........••...............................•...