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

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Jurajda, Stepan
Terrell, Katherine

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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 C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3218.

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Date of creation: Feb 2002
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Handle: RePEc:cpr:ceprdp:3218

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Related research
Keywords: job creation; job destruction; transition;

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Find related papers by JEL classification:
E00 - Macroeconomics and Monetary Economics - - General - - - General
J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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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.:
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  2. Boeri, Tito & Burda, Michael C, 1995. "Active Labour Market Policies, Job Matching and the Czech Miracle," CEPR Discussion Papers 1302, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Simon Johnson & Daniel Kaufman & Andrei Shleifer, 1997. "The Unofficial Economy in Transition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1997-2), pages 159-240. [Downloadable!]
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    Other versions:
  5. Sorm, Vit & Terrell, Katherine, 2000. "Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic," Journal of Comparative Economics, Elsevier, vol. 28(3), pages 431-455, September. [Downloadable!] (restricted)
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  6. Pritchett, Lant, 2000. "Understanding Patterns of Economic Growth: Searching for Hills among Plateaus, Mountains, and Plains," World Bank Economic Review, Oxford University Press, vol. 14(2), pages 221-50, May. [Downloadable!]
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  8. Zuzana Brixiova, 1997. "On the Speed of Transition in Central and Eastern Europe: Does On-the-Job Search Matter?," IMF Working Papers 97/102, International Monetary Fund.
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  10. 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!]
    Other versions:
  11. 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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  12. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932.
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  14. Caballero, Ricardo J & Engel, Eduardo M R A & Haltiwanger, John, 1997. "Aggregate Employment Dynamics: Building from Microeconomic Evidence," American Economic Review, American Economic Association, vol. 87(1), pages 115-37, March. [Downloadable!] (restricted)
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  15. Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition Central Europe," NBER Working Papers 4736, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Atkeson, Andrew & Kehoe, Patrick J, 1996. "Social Insurance and Transition," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 377-401, May.
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  17. Topel, Robert, 1999. "Labor markets and economic growth," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 44, pages 2943-2984 Elsevier. [Downloadable!] (restricted)
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  19. 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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  20. Bilsen, Valentijn & Konings, Jozef, 1998. "Job Creation, Job Destruction, and Growth of Newly Established, Privatized, and State-Owned Enterprises in Transition Economies: Survey Evidence from Bulgaria, Hungary, and Romania," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 429-445, September. [Downloadable!] (restricted)
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  21. Oliver Jean Blanchard & Peter Diamond, 1990. "The Cyclical Behovior of the Gross Flows of U.S. Workers," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1990-2), pages 85-156. [Downloadable!]
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  25. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
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  26. Tito Boeri, 1999. "Transition with Labour Supply," William Davidson Institute Working Papers Series 274, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  27. Burda, Michael C, 1992. "Unemployment, Labour Market Institutions and Structural Change in Eastern Europe," CEPR Discussion Papers 746, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  29. Katz Barbara G. & Owen Joel, 1993. "Privatization: Choosing the Optimal Time Path," Journal of Comparative Economics, Elsevier, vol. 17(4), pages 715-736, December. [Downloadable!] (restricted)
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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. Katalin Balla & János Köllo & András Simonovits, 2006. "Transition with Heterogeneous Labor," IZA Discussion Papers 2179, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. 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!]
  3. 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 Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  4. 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. [Downloadable!]
  5. Stepan Jurajda & Katherine Terrell, 2002. "Job Growth in Early Transition: Comparing Two Paths," CERGE-EI Working Papers wp201, The Center for Economic Research and Graduate Education - Economic Institute, Prague. [Downloadable!]
    Other versions:
  6. 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!]
  7. Raul Eamets, 2004. "Labour market flows and adjustment to macroeconomic shocks in the Baltic States," Post-Communist Economies, Taylor and Francis Journals, vol. 16(1), pages 47-71, March. [Downloadable!] (restricted)
  8. 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!]
  9. 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 Stephen M. Ross Business School. [Downloadable!]
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