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Marshall and Labor Demand in Russia: Going Back to Basics

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Author Info
Jozef Konings
Hartmut Lehmann

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Abstract

Using a unique data set of medium and large enterprises (MLEs), which covers four Russian regions and the three sectors manufacturing and mining, construction and trade and distribution, we estimate fixed effects specifications of static labor demand equations for the year 1997. The most important conclusion that can be drawn is that, even though labor demand is relatively inelastic in international perspective, six years into transition Russian MLEs are responsive to wage changes in their employment decisions. A second interesting finding shows that there are distinct differences in the behavior of state-owned enterprises, which exhibit a weaker wage employment trade-off than privatized and partially privatized firms. Looking at the entire sample and various sub-samples we also try to relate the estimated wage elasticities to the empirical evidence on three of Marshall’s rules of derived demand. Our results show that investigating empirically these rules seems a promising avenue for establishing some of the driving forces behind labor demand in Russia.

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Paper provided by Centre for Economic Reform and Transformation, Heriot Watt University in its series CERT Discussion Papers with number 0203.

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Date of creation: 2002
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Handle: RePEc:hwe:certdp:0203

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Related research
Keywords: Employment determination;

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Find related papers by JEL classification:
J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
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. Ian Domowitz & R. Glenn Hubbard & Bruce C. Petersen, 1988. "Market Structure and Cyclical Fluctuations in U.S. Manufacturing," NBER Working Papers 2115, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. 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. [Downloadable!] (restricted)
    Other versions:
  3. Robert E. Hall, 1988. "The Relation Between Price and Marginal Cost in U.S. Industry," NBER Working Papers 1785, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Brown, J David & Earle, John S, 2000. "Competition And Firm Performance: Lessons From Russia," CEPR Discussion Papers 2444, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. 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. [Downloadable!] (restricted)
  6. Peter J. Luke & Mark E. Schaffer, 1999. "Wage Determination in Russia: An Econometric Investigation," CERT Discussion Papers 9908, Centre for Economic Reform and Transformation, Heriot Watt University. [Downloadable!]
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  7. Alessandro Acquisti & Hartmut Lehmann, 1999. "Job Creation and Job Destruction in Russia: Some Preliminary Evidence from Enterprise-level Data," LICOS Discussion Papers 8499, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  8. Levinsohn, James, 1993. "Testing the imports-as-market-discipline hypothesis," Journal of International Economics, Elsevier, vol. 35(1-2), pages 1-22, August. [Downloadable!] (restricted)
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  9. Jozef Konings & Patrick Paul Walsh, 1999. "Employment Dynamics of Newly Established and Traditional Firms: A Comparison of Russia an the Ukraine," LICOS Discussion Papers 8199, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  10. Newell, Andrew & Reilly, Barry, 1996. "The gender wage gap in Russia: Some empirical evidence," Labour Economics, Elsevier, vol. 3(3), pages 337-356, October. [Downloadable!] (restricted)
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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. Jaan Masso & Almas Heshmati, 2003. "The Optimality And Overuse Of Labour In Estonian Manufacturing Enterprises," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 20, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
    Other versions:
  2. Konings, Jozef & Kupets, Olga & Lehmann, Hartmut, 2003. "Gross Job Flows in Ukraine: Size, Ownership and Trade Effects," CEPR Discussion Papers 3802, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    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. John S. Earle & J. David Brown, 2002. "The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants," Staff Working Papers 02-83, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
    Other versions:
  5. H. Lehmann & N. Pignatti & J. Wadsworth, 2005. "The Incidence and Cost of Job Loss in the Ukrainian Labor Market," Working Papers 545, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
    Other versions:
  6. Martin Wall, 2003. "Estimating the Economic Impact of HIV/AIDs on the countries of the Former Soviet Union," Working Papers 1, Economics and Statistics Analysis Unit (ESAU), Overseas Development Institute. [Downloadable!]
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