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

Tomasz Mickiewicz, Chris J. Gerry, Kate Bishop

Research output: Working paper

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. Kollo, 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.
Original languageEnglish
Place of PublicationLondon (UK)
PublisherUniversity College London
Publication statusPublished - 2004

Publication series

NameEconomics working paper
PublisherUCL SSEES : Centre for comparative economics
No.37

Fingerprint

Employment growth
Poland
Panel data
Labor hoarding
Insider
Wages
Demand shocks
Revenue
Employment change
Private companies
Employment adjustment
Employment dynamics
Asymmetry
Factors
Output growth
Rent sharing
Elasticity
Sales growth
Responsiveness

Cite this

Mickiewicz, T., Gerry, C. J., & Bishop, K. (2004). Inherited labour hoarding, insiders and employment growth: panel data results : Poland, 1996-2002. (Economics working paper; No. 37). London (UK): University College London.
Mickiewicz, Tomasz ; Gerry, Chris J. ; Bishop, Kate. / Inherited labour hoarding, insiders and employment growth : panel data results : Poland, 1996-2002. London (UK) : University College London, 2004. (Economics working paper; 37).
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Mickiewicz, T, Gerry, CJ & Bishop, K 2004 'Inherited labour hoarding, insiders and employment growth: panel data results : Poland, 1996-2002' Economics working paper, no. 37, University College London, London (UK).

Inherited labour hoarding, insiders and employment growth : panel data results : Poland, 1996-2002. / Mickiewicz, Tomasz; Gerry, Chris J.; Bishop, Kate.

London (UK) : University College London, 2004. (Economics working paper; No. 37).

Research output: Working paper

TY - UNPB

T1 - Inherited labour hoarding, insiders and employment growth

T2 - panel data results : Poland, 1996-2002

AU - Mickiewicz, Tomasz

AU - Gerry, Chris J.

AU - Bishop, Kate

PY - 2004

Y1 - 2004

N2 - 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. Kollo, 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.

AB - 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. Kollo, 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.

M3 - Working paper

T3 - Economics working paper

BT - Inherited labour hoarding, insiders and employment growth

PB - University College London

CY - London (UK)

ER -

Mickiewicz T, Gerry CJ, Bishop K. Inherited labour hoarding, insiders and employment growth: panel data results : Poland, 1996-2002. London (UK): University College London. 2004. (Economics working paper; 37).