Rumin SHAKHNOVICH
Galina YUDASHKINA
Department of World Economy
Siberian University of Consumer Cooperation
Novosibirsk
RUSSIA
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ABSTRACT:
We use dynamic labor demand model in order to define the type of enterprise behavior, which depends on how the firm adjusts employment in response to changes in wage. Formation of enterprise behavior in transition occurs under the condition of recession but employment and wages adjust to the changes of output with some lag. Our analysis covers six years and thus captures early transition (1992 – 1995) and also postprivatization (1996 – 1998) changes of labor demand and also solves the problem of lagged variables in empirical work. We also into account some factors typical for Russian economy and for Novosibirsk region.
KEY WORDS: wage, employment, labor demand model, enterprise behavior, transition.
