Employment Concentration and Resource Allocation: One-Company Towns in Russia

34 Pages Posted: 23 Oct 2011

See all articles by Simon John Commander

Simon John Commander

London Business School; IZA Institute of Labor Economics

Zlatko Nikoloski

University College London

Alexander Plekhanov

International Monetary Fund (IMF)

Abstract

The paper looks at the effects of employment concentration on resource allocation with a particular focus on one-company towns in Russia defined as towns where a single company accounts for a significant share of total employment of the locality. Empirical analysis of firms' production functions indicates that companies located in one-company towns are characterised by lower marginal product of labour, higher marginal product of capital and lower overall productivity pointing towards significant labour hoarding. One-company town enterprises are also found to be financially more vulnerable. The paper argues that the dominance of natural resources in the Russian economy and employment concentration is closely linked.

Keywords: employment concentration, one-company towns, labour productivity, Russia

JEL Classification: D24, J42, R23

Suggested Citation

Commander, Simon John and Nikoloski, Zlatko and Plekhanov, Alexander, Employment Concentration and Resource Allocation: One-Company Towns in Russia. IZA Discussion Paper No. 6034. Available at SSRN: https://ssrn.com/abstract=1948030

Simon John Commander (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Zlatko Nikoloski

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Alexander Plekhanov

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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