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Marshall and Labour Demand in Russia: Going Back to Basics

Author

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  • Konings, Jozef

    () (KU 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.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp372
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    References listed on IDEAS

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    1. 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.
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    4. Lehmann, Hartmut & Wadsworth, Jonathan, 2000. "Tenures That Shook the World: Worker Turnover in Russia, Poland, and Britain," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 639-664, December.
    5. Newell, Andrew & Reilly, Barry, 1996. "The gender wage gap in Russia: Some empirical evidence," Labour Economics, Elsevier, vol. 3(3), pages 337-356, October.
    6. 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 921-947, October.
    7. 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, KU Leuven.
    8. 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.
    9. Domowitz, Ian & Hubbard, R Glenn & Petersen, Bruce C, 1988. "Market Structure and Cyclical Fluctuations in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 55-66, February.
    10. 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.
    11. 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).
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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. Jaan Masso & Almas Heshmati, 2004. "The optimality and overuse of labour in Estonian manufacturing enterprises," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(4), pages 683-720, December.
    4. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2002. "Gross Job Flows in Ukraine: Size, Ownership and Trade Effects," William Davidson Institute Working Papers Series 521, William Davidson Institute at the University of Michigan.
    5. 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.
    6. J. David Brown & John S. Earle, "undated". "The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants," Upjohn Working Papers and Journal Articles jse20031, W.E. Upjohn Institute for Employment Research.
    7. Lehmann, Hartmut & Pignatti, Norberto & Wadsworth, Jonathan, 2006. "The incidence and cost of job loss in the Ukrainian labor market," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 248-271, June.
    8. Schaffer M.E. & Dohmen T.J. & Lehmann H., 2013. "Wage policies of a Russian firm and the financial crisis of 1998: Evidence from personnel data - 1997-2002," ROA Research Memorandum 012, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    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. 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.
    11. 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.
    12. Tomasz Marek Mickiewicz & Christopher Gerry & Kate Bishop, 2004. "Inherited labour hoarding, insiders and employment growth. Panel data results: Poland, 1996-2002," UCL SSEES Economics and Business working paper series 37, UCL School of Slavonic and East European Studies (SSEES).

    More about this item

    Keywords

    demand for labour; Transition economics;

    JEL classification:

    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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