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Gross Job Flows in Transition Countries: Results from Company Accounts Data for Bulgaria, Estonia and Romania

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  • Giulia Faggio
  • Jozef Konings

Abstract

This paper studies patterns of gross job creation and destruction in Bulgaria, Estonia and Romania. To this end a unique data set of more than 1600 Bulgarian, 350 Estonian and 3700 Romanian firms in various sectors and located in various regions is used. We find that gross job destruction dominates job creation, but the latter is picking up as transition progresses. We also find that small firms have higher gross job flows than larger ones. There are important sectoral, industry and regional differences in gross job reallocation. In addition, there is a lot of heterogeneity within sectors and within regions, as most of the excess job reallocation can be explained by employment shift within the same sector or region. There are also important differences across countries. Estonia is characterised by higher job flows rates than Bulgaria and Romania. This indicates that there is more firm restructuring going on in Estonia than in the other two countries. Bulgaria and Romania exhibit instead a similar sectoral pattern at the two-digit sectoral level, which can be explained by technological differences across sectors that hold independent of the country. However, if only the manufacturing sector is considered, the more traditional sector, institutional differences play an important role in explaining job flows variations in Bulgaria and Romania. Furthermore, the interaction between the two effects can better account for variations in the real churning of jobs.

Suggested Citation

  • Giulia Faggio & Jozef Konings, 1998. "Gross Job Flows in Transition Countries: Results from Company Accounts Data for Bulgaria, Estonia and Romania," LICOS Discussion Papers 7798, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    • Handle: RePEc:lic:licosd:7798
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp77.pdf
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    References listed on IDEAS

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    1. John Baldwin & Timothy Dunne & John Haltiwanger, 1998. "A Comparison Of Job Creation And Job Destruction In Canada And The United States," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 347-356, August.
    2. Dunne, Timothy & Roberts, Mark J & Samuelson, Larry, 1989. "Plant Turnover and Gross Employment Flows in the U.S. Manufacturing Sector," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 48-71, January.
    3. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
    4. Bilsen, Valentijn & Konings, Jozef, 1998. "Job Creation, Job Destruction, and Growth of Newly Established, Privatized, and State-Owned Enterprises in Transition Economies: Survey Evidence from Bulgaria, Hungary, and Romania," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 429-445, September.
    5. Steven J. Davis & John Haltiwanger, 1990. "Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 123-186, National Bureau of Economic Research, Inc.
    6. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 819-863.
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    Cited by:

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    2. Zuzana Brixiova & Wenli Li, 1998. "Skill Acquisition and Private Firm Creation in Transition Economies," William Davidson Institute Working Papers Series 162, William Davidson Institute at the University of Michigan.

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    More about this item

    Keywords

    job creation; job destruction; transition economies;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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