Labor Hoarding in Russia: Where Does it Come From?

The paper focuses on the labor "hoarding" problem in Russian. We studied two forms of "hoarding": unpaid leaves and short-time work. Our research is based on the Russian Longitudinal Monitoring Survey (RLMS) database. The paper exploits individual panel data between 1994 and 1996. We show that unpaid leaves and short-time work do not represent a form of hidden unemployment. Both types of labor "hoarding" reflect the nature of employees' professional competencies. First, unpaid leaves concern primarily the employees with firm-specific knowledge, while short-time work affects strongly unskilled workers. Second, external mobility is mostly related to young people and unskilled blue-collar workers while employees with specific competencies do not change jobs so much. The paper insists on significant internal adjustments which are taking place through unpaid leaves and short-time work. This explains why there has been no massive unemployment in Russia until now. In conclusion, Russian labor market is characterized rather by internal flexibility than by labor "hoarding".http://deepblue.lib.umich.edu/bitstream/2027.42/39778/3/wp394.pd

Labor hoarding and inventories

Labor hoarding is a widely believed empirical behavior of firms and a prominent explanation for procyclical labor productivity. Conventional wisdom attributes labor hoarding to labor adjustment costs. This paper argues that the conventional wisdom is inadequate for understanding labor hoarding because it ignores the role of inventories. Since idle labor can be used to produce inventories, why do firms hoard labor when inventory is an option? Using a dynamic rational expectations model of profit-maximizing firms facing demand uncertainty, this paper studies the dynamic interactions between labor hoarding and inventory accumulation. Closed-form decision rules for labor and inventory decisions are derived. The analysis shows that labor adjustment costs alone are far from sufficient for explaining labor hoarding. ; Earlier title: On the optimal volume of labor hoardingProductivity ; Labor supply

Labor Demand During the Crisis: What Happened in Germany?

In Germany, the employment response to the post-2007 crisis has been muted compared to other industrialized countries. Despite a large drop in output, employment has hardly changed. In this paper, we analyze the determinants of German firms' labor demand during the crisis using a firm-level panel dataset. Our analysis proceeds in two steps. First, we estimate a dynamic labor demand function for the years 2000-2009 accounting for the degree of working time flexibility and the presence of works councils. Second, on the basis of these estimates, we use the difference between predicted and actual employment as a measure of labor hoarding as the dependent variable in a cross-sectional regression for 2009. Apart from total labor hoarding, we also look at the determinants of subsidized labor hoarding through short-time work. The structural characteristics of firms using these channels of adjustment differ. Product market competition has a negative impact on total labor hoarding but a positive effect on the use of short-time work. Firm covered by collective agreements hoard less labor overall; firms without financial frictions use short-time work less intensively.labor demand, economic crisis, short-time work, financial frictions, labor market institutions, employment adjustment

Labor Hoarding in Russia: Where Does it Come From?

The paper focuses on the labor "hoarding" problem in Russian. We studied two forms of "hoarding": unpaid leaves and short-time work. Our research is based on the Russian Longitudinal Monitoring Survey (RLMS) database. The paper exploits individual panel data between 1994 and 1996. We show that unpaid leaves and short-time work do not represent a form of hidden unemployment. Both types of labor "hoarding" reflect the nature of employees' professional competencies. First, unpaid leaves concern primarily the employees with firm-specific knowledge, while short-time work affects strongly unskilled workers. Second, external mobility is mostly related to young people and unskilled blue-collar workers while employees with specific competencies do not change jobs so much. The paper insists on significant internal adjustments which are taking place through unpaid leaves and short-time work. This explains why there has been no massive unemployment in Russia until now. In conclusion, Russian labor market is characterized rather by internal flexibility than by labor "hoarding".labor market, internal adjustments, flexibility. Russia, skills

Labor Hoarding In Russia: Where Does It Come From?

The paper focuses on the labor "hoarding" problem in Russian. We studied two forms of "hoarding": unpaid leaves and short-time work. Our research is based on the Russian Longitudinal Monitoring Survey (RLMS) database. The paper exploits individual panel data between 1994 and 1996. We show that unpaid leaves and short-time work do not represent a form of hidden unemployment. Both types of labor "hoarding" reflect the nature of employees' professional competencies. First, unpaid leaves concern primarily the employees with firm-specific knowledge, while short-time work affects strongly unskilled workers. Second, external mobility is mostly related to young people and unskilled blue-collar workers while employees with specific competencies do not change jobs so much. The paper insists on significant internal adjustments which are taking place through unpaid leaves and short-time work. This explains why there has been no massive unemployment in Russia until now. In conclusion, Russian labor market is characterized rather by internal flexibility than by labor "hoarding".labor market; internal adjustments; flexibility; Russia; skills.

What Does It Take to Explain Procyclical Productivity

Labor productivity comoves strongly with output, leads output and employment, and is only weakly correlated with employment at the businesscycle frequency. Procyclical productivity is observed in virtually all countries and industries, and it is observed at both the business-cycle frequency and the seasonal frequency. Such prominent features of economic °uctuations present a litmus test for business cycle theory. The conventional explanations for procyclical labor productivity are factor hoarding (labor hoarding and capacity utilization) or increasing returns to scale. Existing equilibrium-business cycle theory explain procyclical labor productivity by technology shocks. The sheer magnitude of excess volatilities in productivity relative to employment seems to defy explanations from increasing returns alone. The technology-shock explanation, on the other hand, comes perilously close to assuming the conclusion. Furthermore, even in periods of pure demand shocks, labor productivity remains procyclical. Applying general equilibrium theory, this paper shows that neither technology shocks nor increasing returns to scale are necessary for understanding procyclical productivity. Factor hoarding is su±cient for demand shocks to induce procyclical productivity at both aggregate and disaggregate levels despite constant or even diminishing returns to scale.

Labor Demand During the Crisis: What Happened in Germany?

In Germany, the employment response to the post-2007 crisis has been muted compared to other industrialized countries. Despite a large drop in output, employment has hardly changed. In this paper, we analyze the determinants of German firms’ labor demand during the crisis using a firm-level panel dataset. Our analysis proceeds in two steps. First, we estimate a dynamic labor demand function for the years 2000-2009 accounting for the degree of working time flexibility and the presence of works councils. Second, on the basis of these estimates, we use the difference between predicted and actual employment as a measure of labor hoarding as the dependent variable in a cross-sectional regression for 2009. Apart from total labor hoarding, we also look at the determinants of subsidized labor hoarding through short-time work. The structural characteristics of firms using these channels of adjustment differ. Product market competition has a negative impact on total labor hoarding but a positive effect on the use of short-time work. Firm covered by collective agreements hoard less labor overall; firms without financial frictions use short-time work less intensively.labor demand, economic crisis, short-time work, financial frictions, labor market institutions, employment adjustment

Labor Hoarding, Inflexible Prices, and Procyclical Productivity

Hall has pointed out that, when there is perfect competition and price flexibility, labor hoarding alone will not induce the Solow residual measured using labor's share in revenues to be procyclical. We show that, even with perfect competition, a small amount of price rigidity - we assume firms must set price slightly before the level of demand becomes known - makes the extent of procyclical productivity depend mainly on the extent of labor hoarding. We show that indeed, whether productivity is measured via the Solow method using labor's share in revenues or using other methods, it tends to be more procyclical in industries and in nations where labor hoarding is more important

Excess Labor and the Business Cycle

This paper compares the Medoff-Fay estimates of labor hoarding during troughs, which are based on data from manufacturing plants, with aggregate estimates of excess labor on hand.The two sets of estimates seem consistent, which provides a strong argument in favor of the excess labor hypothesis. This is one of the few examples in macroeconomics where a hypothesis has been so strongly confirmed using detailed micro data.

Labor demand during the crisis: What happened in Germany?

In Germany, the employment response to the post-2007 crisis has been muted compared to other industrialized countries. Despite a large drop in output, employment has hardly changed. In this paper, we analyze the determinants of German firms' labor demand during the crisis using a firm-level panel dataset. Our analysis proceeds in two steps. First, we estimate a dynamic labor demand function for the years 2000-2009 accounting for the degree of working time flexibility and the presence of works councils. Second, on the basis of these estimates, we use the difference between predicted and actual employment as a measure of labor hoarding as the dependent variable in a cross-sectional regression for 2009. Apart from total labor hoarding, we also look at the determinants of subsidized labor hoarding through short-time work. The structural characteristics of firms using these channels of adjustment differ. Product market competition has a negative impact on total labor hoarding but a positive effect on the use of short-time work. Firm covered by collective agreements hoard less labor overall; firms without financial frictions use short-time work less intensively