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

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Author Info

  • Brown, J. David

    ()
    (U.S. Census Bureau)

  • Earle, John S.

    ()
    (George Mason University)

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 labor 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 labor 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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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 564.

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Length: 39 pages
Date of creation: Sep 2002
Date of revision:
Publication status: published in: Economics of Transition, 2003, 11 (2), 221-252
Handle: RePEc:iza:izadps:dp564

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Keywords: layoffs; labor turnover; job destruction; job creation; transition; Russia;

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References

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  1. Hartmut Lehmann & Jonathan Wadsworth, 2000. "Tenures that shook the world: Worker Turnover in Russia, Poland and Britain," LICOS Discussion Papers 9500, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  2. 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, December.
  3. 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 661-707, July.
  4. Konings, Jozef & Lehmann, Hartmut, 2001. "Marshall and Labour Demand in Russia: Going Back to Basics," IZA Discussion Papers 372, Institute for the Study of Labor (IZA).
  5. 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).
  6. Haltiwanger, John C. & Vodopivec, Milan, 1999. "Gross worker and job flows in a transition economy : an analysis of Estonia," Policy Research Working Paper Series 2082, The World Bank.
  7. Hartmut Lehmann & Jonathan Wadsworth & Alessandro Acquisti, 1999. "Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation," CERT Discussion Papers 9907, Centre for Economic Reform and Transformation, Heriot Watt University.
  8. Shakhnovich Ruvim & Yudashkina Galina, 2001. "Wage-Setting and Employment Behavior of Enterprises during the Period of Economic Transition," EERC Working Paper Series 01-04e, EERC Research Network, Russia and CIS.
  9. Brown, J David & Earle, John S, 2001. "Privatization, Competition and Reform Strategies: Theory and Evidence from Russian Enterprise Panel Data," CEPR Discussion Papers 2758, C.E.P.R. Discussion Papers.
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  11. J. David Brown & John S. Earle, . "Gross Job Flows in Russian Industry Before and After Reforms: Has Destruction Become More Creative?," Upjohn Working Papers and Journal Articles jse20021, W.E. Upjohn Institute for Employment Research.
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Citations

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Cited by:
  1. 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).
  2. 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.
  3. 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.
  4. J. David Brown & John S. Earle & Volodymyr Vakhitov, . "Wages, Layoffs, and privatization: Evidence from Ukraine," Upjohn Working Papers and Journal Articles jse20064, W.E. Upjohn Institute for Employment Research.
  5. John S. Earle & Klara Sabirianova Peter, 2006. "Complementarity and Custom in Contract Violation," Upjohn Working Papers and Journal Articles 06-129, W.E. Upjohn Institute for Employment Research.
  6. Kőrösi, Gábor, 2005. "Vállalati munkahelyteremtés és -rombolás
    [Corporate job creation and job destruction]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 825-845.
  7. 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.
  8. Earle, John S. & Peter, Klara Sabirianova, 2004. "Contract Violations, Neighborhood Effects, and Wage Arrears in Russia," IZA Discussion Papers 1198, Institute for the Study of Labor (IZA).
  9. Sandra M. Leitner & Robert Stehrer, 2012. "Labour Hoarding during the Crisis: Evidence for selected New Member States from the Financial Crisis Survey," wiiw Working Papers 84, The Vienna Institute for International Economic Studies, wiiw.
  10. Saeed Rasekhi & Saman Ghaderi, 2013. "Marginal Intra-Industry Trade and Employment Reallocation: The Case Study of Iran’s Manufacturing Industries," Journal of Industry, Competition and Trade, Springer, vol. 13(3), pages 417-429, September.
  11. Pekka Ilmakunnas & Mika Maliranta, 2005. "Worker inflow, outflow, and churning," Applied Economics, Taylor & Francis Journals, vol. 37(10), pages 1115-1133.
  12. 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.
  13. 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.
  14. Tuuli Juurikkala & Olga Lazareva, 2012. "Non‐wage benefits, costs of turnover and labour attachment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(1), pages 113-136, 01.
  15. 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.

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