Methods for Reducing Information Asymmetry in the Regional Labour Market* INTRODUCTION The labour market is one of the indicators of well-being of the population, stability and efficiency of the socio-economic development of a region. Researchers adherent to different intellectual traditions, fields of science and theories of economic thought emphasize the importance of the labour market and individuals in the development of economy and society. Similar to any other market, the labour market is characterized by information asymmetry, i.e. uneven dissemination of information and unequal access to data for various market participants, which hinders taking optimal decisions. Negative consequences of this phenomenon include a rise in quantitative and qualitative disproportions between demand and supply in the labour market, unbalanced distribution and utilization of labour resources, and eventually, a decrease in labour productivity and gross regional product (GRP). This proves the necessity for a smart policy to be instituted in the sphere of labour and employment of population that should be based on complete and credible information about the existing situation in the regional labour market. In our previous studies [see: 21; 22; 24], we demonstrated that imperfect information in the regional labour market could be present in numerous information flows and caused adverse outcomes for the participants of this market and the entire region as well. For instance, due to the information asymmetry in the labour market of Perm kray, losses in GRP of this region account for 4–6%, which is comparable with GRP losses of the Republic of Tatarstan, the Udmurt Republic and Nizhny Novgorod oblast. To mitigate the consequences of this “gap” in the labour market, it is necessary to develop measures that would allow reducing information asymmetry. Such measures should take into account the information aspect, which includes collecting, storing and providing information for making managerial decisions by regional authorities. For several decades, academic and practical experts have been trying to resolve the problem of information asymmetry in different markets and its negative influence on economic performance. Addressing these issues remains equally relevant in the context of the development of economic relations in all markets including regional labour markets. The purpose of the study is to develop a set of measures to smooth the information asymmetry in the regional labour market. To achieve this purpose, we aim to solve the following tasks: Abstract The paper develops the methods for reducing information asymmetry in the labour market. The methodological basis of the study is works of leading economists on problems of imperfect information, the labour market and regional economy. The research method includes comparative analysis of legal acts of the subjects of the Russian Federation in terms of the labour market regulation and employment. The authors propose an organisational and economic mechanism to reduce information asymmetry in the regional labour market, which embraces instruments of regional policy in the field of labour and employment, such as encouraging cooperation between public and private employment agencies, forecasting indicators of the labour resources balance and staffing requirements; enhancing information support for decision-making by local authorities. The authors conclude that it is necessary to create a single regional regulatory authority coordinating efforts to smooth the information asymmetry between various participants in the regional labour market. Keywords REGIONAL ECONOMY REGIONAL LABOUR MARKET INFORMATION ASYMMETRY LABOUR AND EMPLOYMENT POLICY ADMINISTRATION MECHANISM Irina
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Methods for Reducing Information Asymmetry in the Regional Labour Market* INTRODUCTION The labour market is one of the indicators of well-being of the population, stability and efficiency of the socio-economic development of a region. Researchers adherent to different intellectual traditions, fields of science and theories of economic thought emphasize the importance of the labour market and individuals in the development of economy and society. Similar to any other market, the labour market is characterized by information asymmetry, i.e. uneven dissemination of information and unequal access to data for various market participants, which hinders taking optimal decisions. Negative consequences of this phenomenon include a rise in quantitative and qualitative disproportions between demand and supply in the labour market, unbalanced distribution and utilization of labour resources, and eventually, a decrease in labour productivity and gross regional product (GRP). This proves the necessity for a smart policy to be instituted in the sphere of labour and employment of population that should be based on complete and credible information about the existing situation in the regional labour market. In our previous studies [see: 21; 22; 24], we demonstrated that imperfect information in the regional labour market could be present in numerous information flows and caused adverse outcomes for the participants of this market and the entire region as well. For instance, due to the information asymmetry in the labour market of Perm kray, losses in GRP of this region account for 4–6%, which is comparable with GRP losses of the Republic of Tatarstan, the Udmurt Republic and Nizhny Novgorod oblast. To mitigate the consequences of this “gap” in the labour market, it is necessary to develop measures that would allow reducing information asymmetry. Such measures should take into account the information aspect, which includes collecting, storing and providing information for making managerial decisions by regional authorities. For several decades, academic and practical experts have been trying to resolve the problem of information asymmetry in different markets and its negative influence on economic performance. Addressing these issues remains equally relevant in the context of the development of economic relations in all markets including regional labour markets. The purpose of the study is to develop a set of measures to smooth the information asymmetry in the regional labour market. To achieve this purpose, we aim to solve the following tasks: Abstract The paper develops the methods for reducing information asymmetry in the labour market. The methodological basis of the study is works of leading economists on problems of imperfect information, the labour market and regional economy. The research method includes comparative analysis of legal acts of the subjects of the Russian Federation in terms of the labour market regulation and employment. The authors propose an organisational and economic mechanism to reduce information asymmetry in the regional labour market, which embraces instruments of regional policy in the field of labour and employment, such as encouraging cooperation between public and private employment agencies, forecasting indicators of the labour resources balance and staffing requirements; enhancing information support for decision-making by local authorities. The authors conclude that it is necessary to create a single regional regulatory authority coordinating efforts to smooth the information asymmetry between various participants in the regional labour market. Keywords REGIONAL ECONOMY REGIONAL LABOUR MARKET INFORMATION ASYMMETRY LABOUR AND EMPLOYMENT POLICY ADMINISTRATION MECHANISM Irina

Authors:

Irina N. YAKUPOVA Sr. Lecturer of Global and Regional Economics, Economic Theory Dept.
Dmitry N. SHULTS Cand. Sc. (Econ.), Associate Professor of Information Systems and Mathematical Methods in Economics Dept.

Abstract:

The paper develops the methods for reducing information asymmetry in the labour market. The methodological basis of the study is works of leading economists on problems of imperfect information, the labour market and regional economy. The research method includes comparative analysis of legal acts of the subjects of the Russian Federation in terms of the labour market regulation and employment. The authors propose an organisational and economic mechanism to reduce information asymmetry in the regional labour market, which embraces instruments of regional policy in the field of labour and employment, such as encouraging cooperation between public and private employment agencies, forecasting indicators of the labour resources balance and staffing requirements; enhancing information support for decision-making by local authorities. The authors conclude that it is necessary to create a single regional regulatory authority coordinating efforts to smooth the information asymmetry between various participants in the regional labour market.

Keywords: REGIONAL ECONOMY, REGIONAL LABOUR MARKET, INFORMATION ASYMMETRY, LABOUR AND EMPLOYMENT POLICY, ADMINISTRATION MECHANISM

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For citation: Yakupova I.N., Shults D.N. Methods for Reducing Information Asymmetry in the Regional Labour Market. Upravlenets – The Manager, 2017, no. 6(70), pp. 10–27.