Wage-Setting and Employment Behavior of Enterprises during the Period of Economic Transition

Ruvim Shakhnovich () and Yudashkina Galina ()

EERC Working Paper Series from EERC Research Network, Russia and CIS

Abstract: Based on the dynamic labor demand model, we investigate wage-setting and employment behavior of enterprises during the period of transition. Using panel data on large-sized and medium-sized enterprises in the Novosibirsk region (1993–1998), we make an effort to identify the type of enterprises' behavior and to determine specific factors that affect it. We found that the type of behavior exhibited by these enterprises corresponds to the "right to manage" model's prediction, i.e., the contract curve coincides with the labor demand curve. We also found that wage-setting and employment behavior of enterprises was influenced by the dominant group of owners during the first period of transition (1994–1996). According to our analysis, workers appropriate some of the enterprise-specific rents in their wages, and the amount of this rent decreases if managers are the dominant group of owners.

Keywords: Russia; enterprise behavior; wage; employment; transition; panel data (search for similar items in EconPapers)
JEL-codes: C33 D21 J23 J53 P31 (search for similar items in EconPapers)
Pages: 74 pages
Date: 2001-11-09
New Economics Papers: this item is included in nep-eec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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