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Job growth in early transition: Comparing two paths

  • Stepán Jurajda
  • Katherine Terrell

Small start-up firms are the engine of job creation in early transition. We ask about differences in their growth 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 that the majority of job growth corresponds to within-industry reallocation. The within-industry growth of small start-up firms is similar in the two countries, in line with the convergence to Western industry firm-size distributions. We also find similar patterns in the evolution of wage differentials between start-ups and old firms and small differences in the extent of low-wage employment in start-ups across the two transition paths. Copyright (c)The European Bank for Reconstruction and Development, 2003.

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Article provided by The European Bank for Reconstruction and Development in its journal The Economics of Transition.

Volume (Year): 11 (2003-06)
Issue (Month): 2 (June)
Pages: 291-320

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Handle: RePEc:bla:etrans:v:11:y:2003-06:i:2:p:291-320
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