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Job Growth in Early Transition: Comparing Two Paths

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Stepan Jurajda
Katherine Terrell

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Abstract

Small start-up firms are the engine of job creation in early transition and yet little is known about the characteristics of this new sector. We seek to identify patterns of job growth in this sector in terms of niches left from central planning and ask about differences in job creation across two different transition economies: Estonia, which experienced rapid destruction of pre-existing firms, and the Czech Republic, which reduced the old sector gradually. We find job growth within industries to be quantitatively more important than job growth due to across-industry reallocation. Furthermore, the industrial composition of start-ups is strikingly similar in the two countries. We offer convergence to "western" industry firm-size distributions as an explanation. We also find regularities in wage evolution across new and old firms, including small differences in job quality across the two transition paths.

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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 wp201.

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Date of creation: Nov 2002
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Handle: RePEc:cer:papers:wp201

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Krishna B. Kumar & Raghuram G. Rajan & Luigi Zingales, 1999. "What Determines Firm Size?," NBER Working Papers 7208, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Philippe Aghion & Olivier J. Blanchard, 1994. "On the Speed of Transition in Central Europe," NBER Chapters, in: NBER Macroeconomics Annual 1994, Volume 9, pages 283-330 National Bureau of Economic Research, Inc. [Downloadable!]
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  3. Stepan Jurajda & Katherine Terrell, 2001. "What Drives the Speed of Job Reallocation during Episodes of Massive Adjustment?," CERGE-EI Working Papers wp170, The Center for Economic Research and Graduate Education - Economic Institute, Prague. [Downloadable!]
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  4. Sorm, Vit & Terrell, Katherine, 2000. "Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic," IZA Discussion Papers 111, Institute for the Study of Labor (IZA). [Downloadable!]
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  5. Earle, John S. & Sakova, Zuzana, 2000. "Business start-ups or disguised unemployment? Evidence on the character of self-employment from transition economies," Labour Economics, Elsevier, vol. 7(5), pages 575-601, September. [Downloadable!] (restricted)
  6. Castanheira, Micael & Roland, Gerard, 2000. "The Optimal Speed of Transition: A General Equilibrium Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 219-39, February.
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  7. David J. Cooper & Daniel M. Berkowitz, 1997. "Start-ups and Transition," William Davidson Institute Working Papers Series 84, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  8. Stiglbauer, Alfred M. & Stahl, Florian & Winter-Ebmer, Rudolf & Zweimüller, Josef, 2002. "Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria," IZA Discussion Papers 546, Institute for the Study of Labor (IZA). [Downloadable!]
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  9. Faggio, Giulia & Josez Konings, 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). [Downloadable!]
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  10. Daniel Berkowitz & David DeJong, 2001. "Policy Reform and Growth in Post-Soviet Russia," William Davidson Institute Working Papers Series 405, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  11. Lubomir Lizal & Jan Svejnar, 2000. "Financial Conditions and Investment during the Transition: Evidence from Czech Firms," CERGE-EI Working Papers wp153, The Center for Economic Research and Graduate Education - Economic Institute, Prague. [Downloadable!]
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  12. Roland, Gerard & Sekkat, Khalid, 2000. "Managerial career concerns, privatization and restructuring in transition economies," European Economic Review, Elsevier, vol. 44(10), pages 1857-1872, December. [Downloadable!] (restricted)
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  13. Andrzej Bratkowski & Irena Grosfeld & Jacek Rostowski, 2000. "Investment and Finance in "de novo" private firms: Empirical Results from the Czech Republic, Hungary and Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(1), pages 101-116, March. [Downloadable!] (restricted)
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  14. Svejnar, Jan, 1999. "Labor markets in the transitional Central and East European economies," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 42, pages 2809-2857 Elsevier. [Downloadable!] (restricted)
  15. Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August. [Downloadable!] (restricted)
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  16. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter. [Downloadable!] (restricted)
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  17. Simon Johnson & John McMillan & Christopher Woodruff, 2000. "Entrepreneurs and the Ordering of Institutional Reform: Poland, Slovakia, Romania, Russia and Ukraine Compared," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(1), pages 1-36, March. [Downloadable!] (restricted)
  18. Ricardo J. Caballero & Mohamad L. Hammour, 2000. "Creative Destruction and Development: Institutions, Crises, and Restructuring," NBER Working Papers 7849, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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 Stephen M. Ross Business School. [Downloadable!]
  2. J. David Brown & John S. Earle, 2004. "Economic Reforms and Productivity-Enhancing Reallocation in the Post-Soviet Transition," Staff Working Papers 04-98, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
    Other versions:
  3. 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). [Downloadable!]
  4. Vladislav Flek & Kamil Galuscak & Jaromir Gottvald & Jaromir Hurnik & Stepan Jurajda & David Navratil & Petr Mares & Daniel Munich & Tomas Sirovatka & Jiri Vecernik, 2004. "Anatomy of the Czech Labour Market:From Over-Employment to Under-Employment in Ten Years?," Working Papers 2004/07, Czech National Bank, Research Department. [Downloadable!]
  5. Stepan Jurajda, 2003. "Does the Short Supply of College Education Bite?," CERGE-EI Working Papers wp213, The Center for Economic Research and Graduate Education - Economic Institute, Prague. [Downloadable!]
  6. Pradeep Mitra & Alexander Muravyev & Mark E. Schaffer, 2008. "Convergence in institutions and market outcomes: Cross-country and time-series evidence from the BEEPS surveys in transition economies," CERT Discussion Papers 0809, Centre for Economic Reform and Transformation, Heriot Watt University. [Downloadable!]
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  7. Giulia Faggio, 2007. "Job Destruction, Job Creation and Unemployment in Transition Countries: What Can We Learn?," CEP Discussion Papers dp0798, Centre for Economic Performance, LSE. [Downloadable!]
  8. Štěpán Jurajda, 2005. "Czech Relative Wages and Returns to Schooling: Does the Short Supply of College Education Bite? (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 55(1-2), pages 83-95, January. [Downloadable!]
  9. Münich, Daniel & Svejnar, Jan, 2007. "Unemployment in East and West Europe," CEPR Discussion Papers 6315, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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