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Job Growth in Early Transition: Comparing Two Paths

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  • Stepan Jurajda

    ()

  • Katherine Terrell

    ()

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 the 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 startups 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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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 503.

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Length: 37 pages
Date of creation: 01 Aug 2002
Date of revision:
Handle: RePEc:wdi:papers:2002-503

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Keywords: Job growth; job creation; job destruction; new sector; transition economies; Czech Republic; Estonia;

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References

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  1. 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.
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  15. Faggio, Giulia & Konings, Jozef, 2003. "Job creation, job destruction and employment growth in transition countries in the 90s," Economic Systems, Elsevier, vol. 27(2), pages 129-154, June.
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