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Demand for labour in Russia

DEMAND FOR LABOUR IN RUSSIA
Contents
Contents 1

Introduction 3

Analysis of labour demand in Russia by region 4

Analysis of labour demand in Russia by industry 5

Analysis of labour demand in Russia by occupation 7


Conclusion 9

Bibliography 10
Introduction
The successful functioning of the labour market is determined by the conformity of the labour demand and labour supply. However, in Russia, there remains the tendency of increasing intensity of labour supply under conditions of sharp decrease in labour demand, which reflects the worsening of the situation at the labour market. Statistical data testifies the increse in demand for work places in line with the reduction of economic demand for labour force. This leads to such negative outcomes as an increase in the number of the unemployed, a rise in social tension in different regions of the country, a decrease in the living standard.
In accordance with these facts the problems of labour demand formation extremely gain in importance. Labour market represents a system of socio-economic relationships between vacant capable of working owners of labour force, in need of journey-work and physical and juridical owners of factors of production, presenting the demand for hired labour force concerning distribution, redistribution, hiring and engaging this labour force into the process of public production.
Such a product as labour force is allotted to the industries of national economy, turning in this way from individually hired employee into the employed in the national economy and its industries. At the same time the total number of employed has two boundaries – the demand for labour force and the quantity of labour resources at a given territory.
This essay makes a focus on the analysis of the Russian labour market by region, by industry and by occupation in order to single out the major hurdles for a successful functioning of labour market.
Analysis of labour demand in Russia by region
Recently, many factors contributed to the gap between labour demand at the national labour markets and labour supply in the sphere of vocational training. Those factors include: the intensive development of the services and small business sector, the implementation of the business planning and matrix organisational corporate structures, a sharp reduction in the product life cycle, increase in competition, structural shifts in economy, population’s expectations concerning the demand for various trades and professions. Such a situation requires a far greater accordance of the state national policies in the markets in hand, that can enhance the effectiveness of human capital usage (and investments in the professional training of personal) as a factor of economic growth, form more rational structure of staff training, substantiate from an economical point of view the parameters of the state order, make these markets more competitive and open as a whole.
In order to solve the problem of labour market and market of educational services coordination and also the problem of substantiating of choice for instruments and mechanisms of the corresponding national state politics, a monitoring of the requirements of the national labour demand was conducted in Ulianovsk region in 2006 by the UlGPU (State University of pedagogics of Ulianovsk) and the Ulianovsk department of IRE RAN (Institute of radio-engineering and electronics of the Russian academy of science) .
The analysis of the collected data allows distinguish some peculiarities of the industrial, territorial and skills structure of the national labour demand.
The demand for qualified labour force is mainly concentrated in the big cities of the Russian Federation – Moscow, Saint Petersburg, Novosibirsk, Nizhniy Novgorod, Ekaterinburg, Samara, Omsk, Kazan’, Ufa, Chelyabinsk, Rostov-on-Don, Perm’, Volgograd and others: 6 out of 7 claimed vacancies correspond to these cities . This fact emphasizes the principal differences in the situation at the urban and rural labour markets. The latter are obviously the most problematic: labour supply can exceed labour demand in rural regions 10 times. Some rural regions are represented by the only employer (a case of monopsony). At the same time the presence of private secondary professional farms and a possibility of realisation of a part of the raised output at the market can actually conceal the availability a sufficient number of work places in an unorganized agricultural sector: here the difference between employment at the labour market and household occupancy is not so distinct.
Analysis of labour demand in Russia by industry
The industrial structure of the labour demand in the Russian Federation is represented in the Table 1. The greatest degree of the territorial urbanization leads naturally to a greater labour demand in the following branches of national economy: industry (34%); trade, catering, material and technical provision, sales and intermediates (22%); education, culture and art (12%), - 2 out of 3 vacancies correspond to these branches of economy. The role of information-calculating provision also becomes noticeable – more than 4 % of the vacancies relate to this industry. We can single out a set of peculiarities as well: the need in labour force of such industry as construction, and also the scarcity of managers in rural regions. These facts confirm the hypothesis of unequal exchange of highly qualified managers between a city and a rural district that experience currently a sharp deficit of managers and production supervisors. Trade is also characterized by sharp warps: the major part of enterprises in this industry (and, of course, the major part of proceeds) is concentrated in the cities (above 1 000 000 people). This in turn leads to considerable scarcity of labour force.
Table 1: Labour demand by industry in urban regions (2006), % :
Branch of economy Share of total labour demand
Industry 34
Construction 5
Transport and communication 9
Trade, catering, material and technical provision, sales and intermediates 22
IT 4
General commercial activities concerning provision of market functioning and operations with real estate 1
Housing and communal services and non-productive types of consumer services 2
Public health service, physical training and social security 7
Education, culture and art 12
Crediting, finance and insurance 1
Institutions of operating control 1
Other industries 1
Total 100

Diagram 1: Labour demand by industry on the basis of Table 1:

The trend towards the universality of workers and their skills that can be employed in a number of branches (broad specialists), gathers pace. The share of the secondary professional vacancies varies within quite broad limits, and it causes a set of problems, connected with the determination of the industrial labour demand, because a share of work places and professions are interchangable (conjugate). At the same time this tendency leads to a higher professional competitiveness of the labour force (graduates’ in particular).
Table 2: Specific gravity of the interchangable vacancies in the branches of economy (2006), % of the quantity of vacancies of the branch :
Branch of economy Specific gravity
Industry 11
Construction 5
Transport and communication 10
Trade, catering, material and technical provision, sales and intermediates 38
IT 21
General commercial activities concerning provision of market functioning and operations with real estate

Housing and communal services and non-productive types of consumer services 25
Public health service, physical training and social security 95
Education, culture and art 44
Crediting, finance and insurance 19
Institutions of operating control 42
Other industries 2
Total 19

The unequal distribution of enterprises of various industries across the country leads to the differences in territorial and industrial concentration of labour demand. The examination of territorial disequilibrium of labour supply and demand requires conducting of special investigations that can explain the following points: 1) intensity and direction of labour migration within a city; 2) intensity and directions of labour migration between a city and rural areas; 3) zones of higher professional concentration labour demand and deficit of labour force and also many other characteristics, describing the functioning of the national labour market and its structure.
Analysis of labour demand in Russia by occupation
The results of the analysis describing the demand for specialists with higher professional education, got by the institutes’ employment services for graduates, confirm the low official level of demand at an urban labour market of young specialists (see Table 3): 9% of the total number of the claimed vacancies, what corresponds to the total distribution requirement for specialists with primary professional, secondary professional and higher professional education. At the same time this result has been got due to the concentration of the major share of vacancies in industrial branch of economy, that under conditions of low level of technology, worn-out primary professional funds (the degree of its deterioration amounts for 44%) forms demand for the following labour force: a) ready to operate a time-worn equipment, that does not correspond to the modern standards of technological processes; b) having practical work experience at enterprises. In such industries as education, public health services the share of demand for young specialists with higher professional education is traditionally high – 20-40% . Young graduates do not even take into consideration such sector as agriculture, preferring to stay in cities and work not in accordance with their trade, despite the extreme labour demand for this category of labour force in the agricultural sector.
Table 3: Industrial structure of labour demand for specialists with higher professional education (2006), in % of the total number of vacancies in the industry
Branch of economy Specific gravity
Industry 6
Agriculture 23
Public health service, physical training and social security 35
Education, culture and art 18
Total 9
The most popular occupations for people with primary professional education demanded by the economy are: 1) seller – 13% out of total number of vacancies for qualified workers; 2) driver – 9%; 3) loader – 6%; 4) plumber – 5%; 5) carpenter – 5%; 6) security guard – 5%; 7) electro-welder – 4%; 8) auto-service worker – 4%; 9) worker of furniture production – 4%; 10) turner -3%.
The most popular occupations for people with primary professional education demanded by the economy are: 1) manager (sales agent) – 21%; 2) medical staff – 10%; 3) trade representative – 10%; 4) accountant – 8%; 5) secretary – 7%. The demand for labour force of these five occupations amounts for 56% of the total labour demand for people with the corresponding level of education.
The most deficit occupations requiring higher professional level of education at the labour market today are: 1) teacher – 29%; 2) engineer – 23%; 3) doctor – 18%; 4) managers of all levels (economics and management) – 6%; 5) accountant – 4%. The demand for labour force of these five occupations amounts for 80% of the total labour demand for people with the corresponding level of education .
Specialists with secondary professional education are in the least favourable position currently: the maximum estimation of their share at the labour demand amounts for 13%, at the same time the demand for qualified employees is 64%, specialists with higher professional education – 23%. At the same time the structure of their training is as follows: with primary professional education – 35%, with secondary professional education – 38%, with higher professional education – 27%. In other words, the volumes of training people within the higher professional education system correspond to the actual structure of labour demand most of all, but there are sufficient disequilibria at the labour market of secondary (surplus) and primary (deficit) professional education.
Conclusion
Russian labour market is being formed under conditions of multi-mode economy, which is represented by private, public and individual sectors. In accordance with this, the structure and scope of the labour market, the peculiarity of which lies in the fact that it functions under conditions of absence of actual capital market, will be changing. The demand for labour force is practically separated from labour supply due to the absence of market mechanism of the territorial and industrial redistribution of investments and labour.
Today the necessity of searching for economical, organisational and legal instruments, that can provide the maximum degree of work-places supply and demand balance in advance is becoming obvious. It should be taken into consideration that chronic unemployment is not only a specific tense in the society, but also an economically unfavourable employment situation.
A great deal of attention should be paid to the differences in labour demand of various regions of the Russian Federation. Urban and rural areas require specialists of different occupations and levels of education.
Training programs that are practiced currently should be reviewed, as there is a sufficient disequilibrium between the real labour market demand and supply. People should not be stimulated any longer to get higher education, as our country is going through a deficit in low-level non-qualified specialties.
And finally, people should themselves investigate which professions are really needed today and in which spheres of economy. Because if labour demand turns out to be less than labour supply for a particular occupation in a particular industry, there can arise a threat of unemployment, and yesterday’s graduates will find themselves on the side of the life.
Bibliography
1. Коровкин А.Г. Динамика занятости и рынка труда: вопросы макроэкономического анализа и прогнозирования. М.: МАКС Пресс, 2007.
2. http://www.oecd.org/dataoecd/34/4/37865500
3. Labour market flexibility and employment security - Russian Federation”. T. Tchetvernina, A. Moscovskaya, I. Soboleva, N. Stepantchikova, Employment Sector, International Labour Office Geneva. http://www.ilo.org/public/english/employment/strat/download/ep31.pdf
4. http://www.pmuc.ru/jornal/number21/lapin.htm
5. The official site of the Ministry of Economy of the Russian Federation: www.economy.gov.ru




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