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Wage-Setting and Employment Behavior of Enterprises during the Period of Economic Transition

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  • Shakhnovich Ruvim

    ()

  • Yudashkina Galina

    ()

Abstract

Based on the dynamic labor demand model, we investigate wage-setting and employment behavior of enterprises during the period of transition. Using panel data on large-sized and medium-sized enterprises in the Novosibirsk region (1993–1998), we make an effort to identify the type of enterprises' behavior and to determine specific factors that affect it. We found that the type of behavior exhibited by these enterprises corresponds to the "right to manage" model's prediction, i.e., the contract curve coincides with the labor demand curve. We also found that wage-setting and employment behavior of enterprises was influenced by the dominant group of owners during the first period of transition (1994–1996). According to our analysis, workers appropriate some of the enterprise-specific rents in their wages, and the amount of this rent decreases if managers are the dominant group of owners.

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Bibliographic Info

Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number 01-04e.

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Length: 74 pages
Date of creation: 09 Nov 2001
Date of revision:
Handle: RePEc:eer:wpalle:01-04e

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Postal: EERC Research Network, Russia and CIS, 1, Mazepy Str., suite 202, Kyiv, 01010 Ukraine
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Related research

Keywords: Russia; enterprise behavior; wage; employment; transition; panel data;

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Cited by:
  1. 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.
  2. Староверов О.В., 2005. "Вложения В Человеческий Капитал И Оплата Труда," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 41(2), апреÐ.
  3. Gimpelson, V. & Kapeliushnikov, R. & Lukyanova, A. & Ryzhikova, Z. & Kulyaeva, G., 2010. "Ownership and Wage Differentiation in Russia," Journal of the New Economic Association, New Economic Association, issue 5, pages 48-72.
  4. Maxim Bouev, 2005. "State Regulations, Job Search and Wage Bargaining: A Study in the Economics of the Informal Sector," William Davidson Institute Working Papers Series wp764, William Davidson Institute at the University of Michigan.
  5. R. Kapelyushnikov., 2004. "Wage-setting Mechanisms in the Russian Industry," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.

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