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Job Growth in Early Transition: Comparing Two Paths

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  • Jurajda, Štepán

    (CERGE-EI)

  • Terrell, Katherine

    (University of Michigan)

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.

Suggested Citation

  • Jurajda, Štepán & Terrell, Katherine, 2002. "Job Growth in Early Transition: Comparing Two Paths," IZA Discussion Papers 589, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp589
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    References listed on IDEAS

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    Cited by:

    1. Jurajda, Stepán & Terrell, Katherine, 2008. "Job Reallocation in Two Cases of Massive Adjustment in Eastern Europe," World Development, Elsevier, vol. 36(11), pages 2144-2169, November.
    2. Mitra, Pradeep & Muravyev, Alexander & Schaffer, Mark E, 2008. "Convergence in Institutions and Market Outcomes: Cross-Country and Time-Series Evidence from the BEEPS Surveys in Transition Economies," IZA Discussion Papers 3863, Institute of Labor Economics (IZA).
    3. Richard Disney & Jelena Laušev, 2011. "Monopsony With Heterogeneous Labour: Evidence From Economic Transition," Discussion Papers 11/11, University of Nottingham, School of Economics.
    4. Lehmann, Hartmut & Philips, Kaia & Wadsworth, Jonathan, 2005. "The incidence and cost of job loss in a transition economy: displaced workers in Estonia, 1989 to 1999," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 59-87, March.
    5. 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).
    6. Ickes, Barry W. & Ofer, Gur, 2006. "The political economy of structural change in Russia," European Journal of Political Economy, Elsevier, vol. 22(2), pages 409-434, June.
    7. Tyrowicz, Joanna & van der Velde, Lucas, 2018. "Labor reallocation and demographics," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 381-412.
    8. Ma, Hong & Qiao, Xue & Xu, Yuan, 2015. "Job creation and job destruction in China during 1998–2007," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 1085-1100.
    9. Brown, J. David & Earle, John S., 2004. "Economic Reforms and Productivity-Enhancing Reallocation in the Post-Soviet Transition," IZA Discussion Papers 1044, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    job creation; job destruction; transition economies; new sector jobs; Estonia; Czech Republic;
    All these keywords.

    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 - Economic Systems - - Socialist Systems and Transition Economies
    • P5 - Economic Systems - - Comparative Economic Systems
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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