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Job growth in early transition: Comparing two paths

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  • Štěpán Jurajda
  • Katherine Terrell

Abstract

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. JEL Classifications: J2, J3, J4, L1, O1, P2.

Suggested Citation

  • Štěpán 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.
    • Handle: RePEc:bla:etrans:v:11:y:2003:i:2:p:291-320
    DOI: 10.1111/1468-0351.00148
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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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