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Inherited labour hoarding, insiders and employment growth. Panel data results: Poland, 1996-2002

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  • Tomasz Marek Mickiewicz

    () (UCL School of Slavonic and East European Studies)

  • Christopher Gerry

    () (UCL School of Slavonic and East European Studies)

  • Kate Bishop

    () (Office for National Statistics, 1 Drummond Gate, London SW1V 2QQ)

Abstract

Using panel data pertaining to large Polish (non-financial) firms this paper examines the determinants of employment change during the period 1996-2002. Paying particular attention to the asymmetry hypothesis we investigate the impact of own wages, outside wages, output growth, regional characteristics and sectoral affiliation on the evolution of employment. In keeping with the 'right to manage' model we find that employment dynamics are not affected negatively by alternative wages. Furthermore, in contrast to the early transition period, we find evidence that employment levels respond to positive sales growth (in all but state firms). The early literature, (e.g. Kőllő, 1998) found that labour hoarding lowered employment elasticities in the presence of positive demand shocks. Our findings suggest that inherited labour hoarding may no longer be a factor. We argue that the present pattern of employment adjustment is better explained by the role of insiders. This tentative conclusion is hinged on the contrasting behaviour of state and privatised companies and the similar behaviour of privatised and new private companies. We conclude that lower responsiveness of employment to both positive and negative changes in revenue in state firms is consistent with the proposition that rent sharing by insiders is stronger in the state sector.

Suggested Citation

  • 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).
  • Handle: RePEc:see:wpaper:37
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    References listed on IDEAS

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    More about this item

    Keywords

    employment; transition; asymmetry; ownership; insiders;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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