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What Drives the Speed of Job Reallocation during Episodes of Massive Adjustment?

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  • Stepan Jurajda
  • Katherine Terrell

Abstract

This paper uses individual-level data to characterize economy-wide job creation and destruction during periods of massive structural adjustment. We contrast the gradualist Czech and the rapid Estonian approach to the destruction of the communist economy to provide evidence on selected macroeconomic theories of reallocation with frictions. We find that gradualism (slowing down job destruction) effectively synchronizes job creation and destruction. Drastic job destruction leads to little or no slowdown of job creation. Small newly established firms are the under-researched fountainhead of jobs during the transition from communist to market oriented economies.

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Paper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp170.

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Date of creation: Dec 2001
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Handle: RePEc:cer:papers:wp170

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Citations

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Cited by:
  1. Balla, Katalin & Köllo, János & Simonovits, András, 2008. "Transition with heterogeneous labor," Structural Change and Economic Dynamics, Elsevier, vol. 19(3), pages 203-220, September.
  2. Jana Stefanová Lauerová & Katherine Terrell, 2002. "Explaining Gender Differences in Unemployment with Micro Data on Flows in Post-Communist Economies," William Davidson Institute Working Papers Series 506, William Davidson Institute at the University of Michigan.
  3. Faggio, Giulia & Konings, Jozef, 2001. "Job Creation, Job Destruction and Employment Growth in Transition Countries in the 90's," IZA Discussion Papers 242, Institute for the Study of Labor (IZA).
  4. John E. Jackson & Bogdan Mach, 2002. "Job Creation, Destruction and Transition in Poland, 1988-1998: Panel Evidence," William Davidson Institute Working Papers Series 502, William Davidson Institute at the University of Michigan.
  5. Altomonte, Carlo & Ottaviano, Gianmarco, 2011. "The role of international production sharing in EU productivity and competitiveness," EIB Papers 3/2011, European Investment Bank, Economics Department.
  6. Wolff, Joachim, 2004. "The Duration of New Job Matches in East and West Germany," Discussion Papers in Economics 360, University of Munich, Department of Economics.
  7. Giulia Faggio, 2007. "Job destruction, job creation and unemployment in transition countries: what can we learn?," LSE Research Online Documents on Economics 19716, London School of Economics and Political Science, LSE Library.
  8. K. Balla & G. Kertesi, 2005. "Privatization, Unemployment and Subsidy," 2005 Meeting Papers 75, Society for Economic Dynamics.
  9. Raul Eamets, 2004. "Labour market flows and adjustment to macroeconomic shocks in the Baltic States," Post-Communist Economies, Taylor & Francis Journals, vol. 16(1), pages 47-71.
  10. Stepán Jurajda & Katherine Terrell, 2003. "Job growth in early transition: Comparing two paths ," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 291-320, June.
  11. Uppenberg, Kristian, 2011. "Economic growth in the US and the EU: a sectoral decomposition," EIB Papers 2/2011, European Investment Bank, Economics Department.
  12. Rumen Dobrinsky, 2004. "Small Private Sector in Bulgaria: Labour Market Impact and “Grey Zone” Activity," wiiw Balkan Observatory Working Papers 037, The Vienna Institute for International Economic Studies, wiiw.
  13. Haltiwanger, John, 2011. "Firm dynamics and productivity growth," EIB Papers 5/2011, European Investment Bank, Economics Department.
  14. Jaan Masso & Raul Eamets & Kaia Philips, 2004. "Where Have All The Jobs Gone? Gross Job Flows In Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 28, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  15. Arnold, Jens & Scarpetta, Stefano & Nicoletti, Giuseppe, 2011. "Regulation, resource reallocation and productivity growth," EIB Papers 4/2011, European Investment Bank, Economics Department.
  16. Strauss, Hubert, 2011. "Productivity and growth in Europe: Editor's introduction," EIB Papers 1/2011, European Investment Bank, Economics Department.
  17. Maxim Bouev, 2004. "Diverging Paths: Transition in the Presence of the Informal Sector," William Davidson Institute Working Papers Series 2004-689, William Davidson Institute at the University of Michigan.

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