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Marshall and Labor Demand in Russia: Going Back to Basics

  • Konings, Jozef
  • Lehmann, Hartmut

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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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 30 (2002)
Issue (Month): 1 (March)
Pages: 134-159

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Handle: RePEc:eee:jcecon:v:30:y:2002:i:1:p:134-159
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

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  1. Hartmut Lehmann & Jonathan Wadsworth, 2000. "Tenures that shook the world: worker turnover in Russia, Poland and Britain," LSE Research Online Documents on Economics 20186, London School of Economics and Political Science, LSE Library.
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  3. Peter J. Luke & Mark E. Schaffer, 2000. "Wage Determination in Russia: An Econometric Investigation," William Davidson Institute Working Papers Series 295, William Davidson Institute at the University of Michigan.
  4. Newell, Andrew & Reilly, Barry, 1996. "The gender wage gap in Russia: Some empirical evidence," Labour Economics, Elsevier, vol. 3(3), pages 337-356, October.
  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.
  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. 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.
  8. J. David Brown & John S. Earle, 2000. "Competition and Firm Performance: Lessons from Russia," William Davidson Institute Working Papers Series 296, William Davidson Institute at the University of Michigan.
  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. 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.
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