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The Incidence and Cost of Job Loss in a Transition Economy: Displaced Workers in Estonia, 1989-1999

Author

Listed:
  • Jozef Konings
  • Olga Kupets
  • Hartmut Lehmann

Abstract

This paper documents and analyses gross job flows and their determinants in Ukraine using a unique data set of more than 2200 Ukrainian firms operating in both the manufacturing and the non-manufacturing sector for the years 1998-2000. There are several important findings in the paper. Job destruction is dominating job creation in both 1999 and 2000. In connection with other evidence we infer from this that Ukraine is only at the beginning of the restructuring process. The most clear-cut result of our analysis is the strong positive effect of new private firms on net employment growth, a finding established for other transition economies as well. At the same time, we do not find differences in the employment growth of state-owned and privatised firms. Apart from ownership effects we also find, at the firm level, an inverse correlation of size and net employment growth and of size and job reallocation. Finally, we establish that strong foreign trade links force firms to shed labour more aggressively and to engage in more restructuring when trade is directed to and originating from Western economies. This disciplining function is absent when the trade flows are confined to CIS countries.

Suggested Citation

  • Jozef Konings & Olga Kupets & Hartmut Lehmann, 2002. "The Incidence and Cost of Job Loss in a Transition Economy: Displaced Workers in Estonia, 1989-1999," CERT Discussion Papers 0210, Centre for Economic Reform and Transformation, Heriot Watt University.
  • Handle: RePEc:hwe:certdp:0210
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    References listed on IDEAS

    as
    1. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
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    Cited by:

    1. Lehmann, Hartmut & Pignatti, Norberto & Wadsworth, Jonathan, 2006. "The incidence and cost of job loss in the Ukrainian labor market," Journal of Comparative Economics, Elsevier, pages 248-271.
    2. Christopher Adam & David Cobham, 2007. "Exchange Rate Regimes And Trade," Manchester School, University of Manchester, pages 44-63.
    3. Atanas Christev & Olga Kupets & Hartmut Lehmann, 2008. "Trade Liberalisation and Employment Effects in Ukraine," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 50(2), pages 318-340, June.
    4. Lehmann, Hartmut & Muravyev, Alexander & Razzolini, Tiziano & Zaiceva, Anzelika, 2010. "The Costs of Job Loss in Russia," IZA Discussion Papers 5415, Institute for the Study of Labor (IZA).
    5. Kerly Krillo & Jaan Masso, 2010. "The Part-Time/Full-Time Wage Gap in Central and Eastern Europe: the Case of Estonia," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 2(1).
    6. Hartmut Lehmann & Alexander Muravyev & Tiziano Razzolini & Anzelika Zaiceva, 2011. "The Wage and Non-wage Costs of Displacement: Evidence from Russia," Center for Economic Research (RECent) 060, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    7. Appelqvist Jukka, 2007. "Wage and Earnings Losses of Displaced Workers in Finland," Discussion Papers 422, Government Institute for Economic Research Finland (VATT).
    8. Hartmut Lehmann & Alexander Muravyev & Tiziano Razzolini & Anzelika Zaiceva, 2011. "The Wage and Non-wage Costs of Displacement: Evidence from Russia," Center for Economic Research (RECent) 060, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".

    More about this item

    Keywords

    job creation; job destruction; Ukraine; private firms; trade;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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