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The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants

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Brown, J David
Earle, John S

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Abstract

Gross job and worker flows in Russian industry are studied using panel data from a recent survey of 530 firms selected through national probability sampling. The data permit an examination of several important measurement issues – including the timing and definition of employment, the roles of split-ups and mergers, and the relative magnitudes of rehiring and new hiring and of quits and layoffs – and they contain a rich set of firm characteristics that may affect job and worker turnover. The results imply that job destruction and worker separation rates in industrial firms rose in the early 1990s, as did job flows as a fraction of worker flows, and layoffs as a fraction of separations. By contrast, job creation and worker hiring rates were flat until 1999, the former low and the latter surprisingly high. Heterogeneity in individual firm behavior increased throughout. New firms and old enterprises that have been reorganized display much larger flows compared with unreorganized enterprises. Unions appear to reduce worker flows, but the structure of neither product nor labour markets shows a significant impact. Private ownership has ambiguous effects: insider ownership, particularly by managers, is associated with higher worker flows and excess job reallocation, while outsider ownership, particularly by blockholders, is associated with lower flow rates. A measure of adjustment costs constructed from the worktime necessary to hire and train a new employee is strongly related to variables usually associated with adjustment costs, including worker wage, education, firm size, capital intensity, and labour productivity, but only weakly to job and worker turnover. Little evidence is found that firms’ employment adjustments have become more sensitive to adjustment costs during the transition, but worker and manager ownership are associated with more sensitivity than are other types of ownership.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3663.

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Date of creation: Nov 2002
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Handle: RePEc:cpr:ceprdp:3663

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Related research
Keywords: job creation; job destruction; labour turnover; layoffs; Russia; transition;

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Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lehmann, Hartmut & Wadsworth, Jonathan, 2000. "Tenures That Shook the World: Worker Turnover in Russia, Poland, and Britain," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 639-664, December. [Downloadable!] (restricted)
    Other versions:
  2. Brown, J. David & Earle, John S., 2002. "Gross Job Flows in Russian Industry Before and After Reforms: Has Destruction Become More Creative?," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 96-133, March. [Downloadable!] (restricted)
    Other versions:
  3. Medoff, James L, 1979. "Layoffs and Alternatives under Trade Unions in U.S. Manufacturing," American Economic Review, American Economic Association, vol. 69(3), pages 380-95, June. [Downloadable!] (restricted)
  4. Jozef Konings & Hartmut Lehmann, 2002. "Marshall and Labor Demand in Russia: Going Back to Basics," CERT Discussion Papers 0203, Centre for Economic Reform and Transformation, Heriot Watt University. [Downloadable!]
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  5. Burgess, Simon & Lane, Julia & Stevens, David, 2001. "Churning dynamics: an analysis of hires and separations at the employer level," Labour Economics, Elsevier, vol. 8(1), pages 1-14, January. [Downloadable!] (restricted)
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  7. Steven J. Davis & John Haltiwanger, 1995. "Measuring Gross Worker and Job Flows," NBER Working Papers 5133, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  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). [Downloadable!]
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  10. John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 661-660, July. [Downloadable!]
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  11. Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August. [Downloadable!] (restricted)
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  12. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932.
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  14. Sabirianova, Klara Z., 2002. "The Great Human Capital Reallocation: A Study of Occupational Mobility in Transitional Russia," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 191-217, March. [Downloadable!] (restricted)
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  15. John Haltiwanger & Marilyn E. Manser & Robert Topel, 1998. "Labor Statistics Measurement Issues," NBER Books, National Bureau of Economic Research, Inc, number halt98-1.
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    Other versions:
  18. Haltiwanger, John C. & Vodopivec, Milan, 2002. "Gross worker and job flows in a transition economy: an analysis of Estonia," Labour Economics, Elsevier, vol. 9(5), pages 601-630, November. [Downloadable!] (restricted)
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  19. Hamermesh, Daniel S. & Hassink, Wolter H.J. & Ours, Jan C. van, 1994. "Job turnover and labor turnover : a taxonomy of employment dynamics," Serie Research Memoranda 0050, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics. [Downloadable!]
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. John S. Earle & Klara Sabirianova Peter, 2006. "Complementarity and Custom in Contract Violation," Staff Working Papers 06-129, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  2. Earle, John S. & Sabirianova Peter, Klara, 2004. "Contract Violations, Neighborhood Effects, and Wage Arrears in Russia," IZA Discussion Papers 1198, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. 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 Stephen M. Ross Business School. [Downloadable!]
  4. Pekka Ilmakunnas & Mika Maliranta, 2005. "Worker inflow, outflow, and churning," Applied Economics, Taylor and Francis Journals, vol. 37(10), pages 1115-1133, June. [Downloadable!] (restricted)
    Other versions:
  5. Tuuli Juurikkala & Olga Lazareva, 2006. "Non-wage benefits, costs of turnover, and labor attachment: evidence from Russian firms," Working Papers w0062, Center for Economic and Financial Research (CEFIR). [Downloadable!]
    Other versions:
  6. Susan J. Linz & Anastasia Semykina, 2005. "Attitudes and Performance: An Analysis of Russian Workers," William Davidson Institute Working Papers Series wp758, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  7. Lazareva Olga, 2006. "Firm-paid vs. worker-paid on-the-job training in Russia: Determinants and returns," EERC Working Paper Series 06-05e, EERC Research Network, Russia and CIS. [Downloadable!]
  8. Manuel Cabral & Joana Silva, 2006. "Intra-Industry Trade Expansion and Employment Reallocation between Sectors and Occupations," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(3), pages 496-520, October. [Downloadable!] (restricted)
  9. J. David Brown & John S. Earle & Vladimir Vakhitov, 2006. "Wages, Layoffs, and Privatization: Evidence from Ukraine," Staff Working Papers 06-126, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
    Other versions:
  10. Brown, J. David & Earle, John S., 2006. "The microeconomics of creating productive jobs : a synthesis of firm-level studies in transition economies," Policy Research Working Paper Series 3886, The World Bank. [Downloadable!]
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