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Marshall and Labor Demand in Russia: Going Back to Basics

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  • Konings, Jozef
  • Lehmann, Hartmut

Abstract

Using a unique enterprise-level data set, which covers the regions Moscow City, Chelyabinsk, Krasnoyarsk and Chuvashia and the three sectors manufacturing and mining, construction and trade and distribution, we estimate Russian labour demand equations for the year 1997. The most important conclusion that can be drawn is that labour demand is inelastic in international perspective if we estimate a labour demand equation for all regions and all sectors combined. So, Russian MLEs well into the transition still exhibit peculiar behaviour as far as wage employment trade-offs are concerned. We try to relate this inelastic labour demand to basic neoclassical theory by testing Marshall’s rules of derived demand. Our results show that testing these rules seems a promising avenue for establishing some of the driving forces, which are behind labour demand in Russia.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 30 (2002)
Issue (Month): 1 (March)
Pages: 134-159

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Handle: RePEc:eee:jcecon:v:30:y:2002:i:1:p:134-159

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Web page: http://www.elsevier.com/locate/inca/622864

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References

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  1. Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-47, October.
  2. Lehmann, Hartmut & Wadsworth, Jonathan, 1999. "Tenures that Shook the World: Worker Turnover in Russia, Poland and Britain," IZA Discussion Papers 90, Institute for the Study of Labor (IZA).
  3. Konings, Jozef & Van Cayseele, Patrick & Warzynski, Frederic, 2001. "The dynamics of industrial mark-ups in two small open economies: does national competition policy matter?," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 841-859, April.
  4. Levinsohn, J., 1991. "Testing the Imports-As-Market-Discipline Hypothesis," Working Papers 272, Research Seminar in International Economics, University of Michigan.
  5. Schaffer, Mark E & Luke, Peter L., 2000. "Wage Determination in Russia: An Econometric Investigation," IZA Discussion Papers 143, Institute for the Study of Labor (IZA).
  6. Brown, J David & Earle, John S, 2000. "Competition And Firm Performance: Lessons From Russia," CEPR Discussion Papers 2444, C.E.P.R. Discussion Papers.
  7. Newell, Andrew & Reilly, Barry, 1996. "The gender wage gap in Russia: Some empirical evidence," Labour Economics, Elsevier, vol. 3(3), pages 337-356, October.
  8. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Insecurity and Wage Arrears in the Russian Federation," IZA Discussion Papers 65, Institute for the Study of Labor (IZA).
  9. Domowitz, Ian & Hubbard, R Glenn & Petersen, Bruce C, 1988. "Market Structure and Cyclical Fluctuations in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 55-66, February.
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Citations

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Cited by:
  1. Tomasz Mickiewicz & Christopher Gerry & Kate Bishop, . "Privatisation, Corporate Control and Employment Growth: Evidence From A Panel of Large Polish Firms, 1996-2002," Working Papers 47 Key Words: employment,, CENTRE FOR THE STUDY OF ECONOMIC AND SOCIAL CHANGE IN EUROPE,School of Slavonic and East European Studies,University College London (SSEES,UCL).
  2. J. David Brown & John S. Earle, 2002. "The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants," William Davidson Institute Working Papers Series 490, William Davidson Institute at the University of Michigan.
  3. Lehmann, Hartmut & Pignatti, Norberto & Wadsworth, Jonathan, 2006. "The incidence and cost of job loss in the Ukrainian labor market," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 248-271, June.
  4. Dong, Xiao-yuan & Xu, Lixin Colin, 2009. "Labor restructuring in China: Toward a functioning labor market," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 287-305, June.
  5. Masso, Jaan & Heshmati, Almas, 2003. "The Optimality and Overuse of Labour in Estonian Manufacturing Enterprises," IZA Discussion Papers 884, Institute for the Study of Labor (IZA).
  6. Jozef Konings & Hartmut Lehmann & Olga Kupets, 2002. "Gross Job Flows in Ukraine: Size, Ownership and Trade Effects," LICOS Discussion Papers 12602, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  7. Kate Bishop & Tomasz Mickiewicz, 2003. "While Labour Hoarding May Be Over, Insiders’ Control Is Not. Determinants Of Employment Growth In Polish Large Firms, 1996-2001," William Davidson Institute Working Papers Series 2003-593, William Davidson Institute at the University of Michigan.
  8. J. David Brown & John S. Earle, 2003. "The reallocation of workers and jobs in Russian industry," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 221-252, June.
  9. Rizov, Marian & Swinnen, Johan F.M., 2004. "Human capital, market imperfections, and labor reallocation in transition," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 745-774, December.
  10. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2003. "Gross job flows in Ukraine," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 321-356, June.

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