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Marshall and Labour Demand in Russia: Going Back to Basics

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  • Konings, Jozef

    ()
    (K.U.Leuven)

  • Lehmann, Hartmut

    ()
    (University of Bologna)

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

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 372.

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Length: 71 pages
Date of creation: Sep 2001
Date of revision:
Publication status: published in: Journal of Comparative Economics, 2002, 30 (1), 160-190
Handle: RePEc:iza:izadps:dp372

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Keywords: demand for labour; Transition economics;

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References

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  1. Hartmut Lehmann & Jonathan Wadsworth, 1999. "Tenures that Shook the World: Worker Turnover in Russia, Poland and Britain," CERT Discussion Papers 9909, Centre for Economic Reform and Transformation, Heriot Watt University.
  2. Brown, J David & Earle, John S, 2000. "Competition And Firm Performance: Lessons From Russia," CEPR Discussion Papers 2444, C.E.P.R. Discussion Papers.
  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, James, 1993. "Testing the imports-as-market-discipline hypothesis," Journal of International Economics, Elsevier, vol. 35(1-2), pages 1-22, August.
  5. Ian Domowitz & R. Glenn Hubbard & Bruce C. Petersen, 1986. "Market Structure and Cyclical Fluctuations in U.S. Manufacturing," NBER Working Papers 2115, National Bureau of Economic Research, Inc.
  6. Robert E. Hall, 1986. "Market Structure and Macroeconomic Fluctuations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 285-338.
  7. Luke, Peter L. & Schaffer, Mark E, 2000. "Wage Determination in Russia: An Econometric Investigation," IZA Discussion Papers 143, Institute for the Study of Labor (IZA).
  8. 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.
  9. 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).
  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.
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Cited by:
  1. Brown, J. David & Earle, John S., 2002. "The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants," IZA Discussion Papers 564, Institute for the Study of Labor (IZA).
  2. 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.
  3. 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).
  4. 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.
  5. 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.
  6. 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.
  7. Hartmut Lehmann & Norberto Pignatti & Jonathan Wadsworth, 2005. "The Incidence and Cost of Job Loss in the Ukrainian Labor Market," CERT Discussion Papers 0504, Centre for Economic Reform and Transformation, Heriot Watt University.
  8. Mickiewicz, Tomasz & Gerry, Christopher J. & Bishop, Kate, 2005. "Privatisation, corporate control and employment growth: Evidence from a panel of large Polish firms, 1996-2002," Economic Systems, Elsevier, vol. 29(1), pages 98-119, March.
  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. 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.

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