IDEAS home Printed from https://ideas.repec.org/p/war/wpaper/2015-11.html
   My bibliography  Save this paper

Productivity and Inequality Effects of Rapid Labor Reallocation – Insights from a Meta-Analysis of Studies on Transition

Author

Listed:
  • Jan Svejnar

    () (Columbia University, CERGE-EI, IZA, CEPR)

  • Joanna Tyrowicz

    () (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland)

  • Lucas van der Velde

    () (Faculty of Economic Sciences, University of Warsaw)

Abstract

From a theoretical perspective the link between the speed and scope of rapid labor reallocation and productivity growth or inequalities remains unclear. Do reallocations with more flows tend to produce higher productivity growth? Does such link appear at the expense of higher inequalities? We explore the rich evidence from earlier studies on worker flows in the period of massive and rapid labor reallocation, i.e. the economic transition from a centrally planned to a market-oriented economy in Central and Eastern Europe. We apply the tools typical for a meta-analysis to verify the empirical regularities between labor flows and productivity growth as well as inequalities. We collected over 450 estimates of job flows from the literature and use these inputs to estimate the short-run and long-run relationship between job flows, labor productivity and inequalities. Our findings suggest relatively weak and short term links with productivity for job destruction/separations. On the other hand, data reveal a strong pattern for inequalities more churning during reallocation is associated with a permanent level efect towards increased Gini indexes.

Suggested Citation

  • Jan Svejnar & Joanna Tyrowicz & Lucas van der Velde, 2015. "Productivity and Inequality Effects of Rapid Labor Reallocation – Insights from a Meta-Analysis of Studies on Transition," Working Papers 2015-11, Faculty of Economic Sciences, University of Warsaw.
  • Handle: RePEc:war:wpaper:2015-11
    as

    Download full text from publisher

    File URL: http://www.wne.uw.edu.pl/index.php/download_file/1567/
    File Function: First version, 2015
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2002. "Gross Job Flows in Ukraine: Size, Ownership and Trade Effects," William Davidson Institute Working Papers Series 521, William Davidson Institute at the University of Michigan.
    2. Balla, Katalin & Köllo, János & Simonovits, András, 2008. "Transition with heterogeneous labor," Structural Change and Economic Dynamics, Elsevier, vol. 19(3), pages 203-220, September.
    3. Sorm, Vit & Terrell, Katherine, 2000. "Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic," Journal of Comparative Economics, Elsevier, vol. 28(3), pages 431-455, September.
    4. De Loecker, Jan & Konings, Jozef, 2006. "Job reallocation and productivity growth in a post-socialist economy: Evidence from Slovenian manufacturing," European Journal of Political Economy, Elsevier, vol. 22(2), pages 388-408, June.
    5. T. D. Stanley & Stephen B. Jarrell, 2005. "Meta-Regression Analysis: A Quantitative Method of Literature Surveys," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 299-308, July.
    6. W. Reed Walker, 2013. "The Transitional Costs of Sectoral Reallocation: Evidence From the Clean Air Act and the Workforce," The Quarterly Journal of Economics, Oxford University Press, vol. 128(4), pages 1787-1835.
    7. Brown, J. David & Earle, John S., 2002. "Gross Job Flows in Russian Industry Before and After Reforms: Has Destruction Become More Creative?," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 96-133, March.
    8. Fidrmuc, Jan, 2003. "Economic reform, democracy and growth during post-communist transition," European Journal of Political Economy, Elsevier, vol. 19(3), pages 583-604, September.
    9. Philippe Aghion & Olivier J. Blanchard, 1994. "On the Speed of Transition in Central Europe," NBER Chapters,in: NBER Macroeconomics Annual 1994, Volume 9, pages 283-330 National Bureau of Economic Research, Inc.
    10. Bruno Amable & Ken Mayhew, 2011. "Unemployment in the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 27(2), pages 207-220.
    11. 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.
    12. Fabrice Murtin & Romain Wacziarg, 2014. "The democratic transition," Journal of Economic Growth, Springer, vol. 19(2), pages 141-181, June.
    13. Boeri, Tito, 2000. "Structural Change, Welfare Systems, and Labour Reallocation: Lessons from the Transition of Formerly Planned Economies," OUP Catalogue, Oxford University Press, number 9780198293651.
    14. Aristei, David & Perugini, Cristiano, 2012. "Inequality and reforms in transition countries," Economic Systems, Elsevier, vol. 36(1), pages 2-10.
    15. Faggio, Giulia & Konings, Jozef, 2003. "Job creation, job destruction and employment growth in transition countries in the 90s," Economic Systems, Elsevier, vol. 27(2), pages 129-154, June.
    16. Haltiwanger, John C. & Vodopivec, Milan, 2002. "Gross worker and job flows in a transition economy: an analysis of Estonia," Labour Economics, Elsevier, vol. 9(5), pages 601-630, November.
    17. Tichit, Ariane, 2006. "The optimal speed of transition revisited," European Journal of Political Economy, Elsevier, vol. 22(2), pages 349-369, June.
    18. Konings, Jozef & Lehmann, Hartmut & Schaffer, Mark E., 1996. "Job creation and job destruction in a transition economy: Ownership, firm size, and gross job flows in Polish manufacturing 1988-1991," Labour Economics, Elsevier, vol. 3(3), pages 299-317, October.
    19. 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.
    20. AMOS GOLAN & JULIA LANE & ERIKA McENTARFER, 2007. "The Dynamics of Worker Reallocation within and across Industries," Economica, London School of Economics and Political Science, vol. 74(293), pages 1-20, February.
    21. Jaan Masso & Almas Heshmati, 2004. "The optimality and overuse of labour in Estonian manufacturing enterprises," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(4), pages 683-720, December.
    22. Pradeep Mitra & Alexander Muravyev & Mark Schaffer, 2014. "Labor reallocation and firm growth: benchmarking transition countries against mature market economies," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-22, December.
    23. J David Brown & John S Earle, 2006. "Job Reallocation and Productivity Growth in the Ukrainian Transition," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(2), pages 229-251, June.
    24. Dong, Xiao-yuan & Xu, Lixin Colin, 2009. "Labor restructuring in China: Toward a functioning labor market," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 287-305, June.
    25. BenYishay, Ariel & Grosjean, Pauline, 2014. "Initial endowments and economic reform in 27 post-socialist countries," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 892-906.
    26. Joanna Tyrowicz & Lucas van der Velde, 2014. "Can We Really Explain Worker Flows in Transition Economies?," Working Papers 2014-28, Faculty of Economic Sciences, University of Warsaw.
    27. Marangos, John, 2002. " The Political Economy of Shock Therapy," Journal of Economic Surveys, Wiley Blackwell, vol. 16(1), pages 41-76, February.
    28. Krueger, Gary & Ciolko, Marek, 1998. "A Note on Initial Conditions and Liberalization during Transition," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 718-734, December.
    29. Evgeni Peev & Dennis C. Mueller, 2012. "Democracy, Economic Freedom and Growth in Transition Economies," Kyklos, Wiley Blackwell, vol. 65(3), pages 371-407, August.
    30. Karsten Albæk & Henrik Hansen, 2004. "The Rise in Danish Unemployment: Reallocation or Mismatch?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(4), pages 515-536, September.
    31. Kyle F. Herkenhoff & Lee E. Ohanian, 2011. "Labor Market Dysfunction During the Great Recession," NBER Working Papers 17313, National Bureau of Economic Research, Inc.
    32. Robert Looney, 2004. "The Viability of Economic Shock Therapy in Iraq," Challenge, Taylor & Francis Journals, vol. 47(5), pages 86-103.
    33. Brindusa Anghel & Sara Rica & Aitor Lacuesta, 2014. "The impact of the great recession on employment polarization in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(2), pages 143-171, August.
    34. Sachs, J.D. & Woo, W.T., 1994. "Structural Factors in the Economic Reforms of China, Eastern Europe and the Former Soviet Union," Papers 94-01, California Davis - Institute of Governmental Affairs.
    35. Stepán 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.
    36. Hendrik Dalen & Kène Henkens, 2013. "Dilemmas of Downsizing During the Great Recession: Crisis Strategies of European Employers," De Economist, Springer, vol. 161(3), pages 307-329, September.
    37. Jeffrey Sachs, 1995. "Reforms in Eastern Europe and the Former Soviet Union in Light of the East Asian Experiences," CASE Network Studies and Analyses 0039, CASE-Center for Social and Economic Research.
    38. Harry Papapanagos & Peter Sanfey, 2003. "Emigration and the Optimal Speed of Transition," Review of International Economics, Wiley Blackwell, vol. 11(3), pages 541-554, August.
    39. Stefan Bojnec & Jozef Konings, 1998. "Job Creation, Job Destruction and Labour Demand in Slovenia," LICOS Discussion Papers 7498, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    40. Vladimir Gimpelson & Rostislav Kapeliushnikov & Anna Lukiyanova, 2010. "Stuck between Surplus and Shortage: Demand for Skills in Russian Industry," LABOUR, CEIS, vol. 24(3), pages 311-332, September.
    41. Alessandro Acquisti & Hartmut Lehmann, 2000. "Job Creation and Job Destruction in the Russian Federation," Trinity Economics Papers 20001, Trinity College Dublin, Department of Economics.
    42. Olivier Blanchard & Florence Jaumotte & Prakash Loungani, 2014. "Labor market policies and IMF advice in advanced economies during the Great Recession," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-23, December.
    43. Hogrefe, Jan & Sachs, Andreas, 2014. "Unemployment and labor reallocation in Europe," ZEW Discussion Papers 14-083, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    44. John Earle, 2012. "Industrial decline and labor reallocation in a transforming economy: Romania in early transition," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-18, December.
    45. Daniel Aaronson & Ellen R. Rissman & Daniel G. Sullivan, 2004. "Can sectoral reallocation explain the jobless recovery?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 36-39.
    46. Riccardo Rovelli & Anzelika Zaiceva, 2013. "Did support for economic and political reforms increase during the post-communist transition, and if so, why?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 21(2), pages 193-240, April.
    47. Jarkko Turunen, 2004. "Leaving state sector employment in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(1), pages 129-152, March.
    48. Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition Central Europe," NBER Working Papers 4736, National Bureau of Economic Research, Inc.
    49. Randolph Luca Bruno, 2006. "Optimal speed of transition with a shrinking labour force and under uncertainty ," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(1), pages 69-100, March.
    50. Amin, Mohammad & Djankov, Simeon, 2014. "Democratic institutions and regulatory reforms," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 839-854.
    51. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 819-863.
    52. Frédéric Warzynski, 2003. "The causes and consequences of sector-level job flows in Poland ," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 357-381, June.
    53. Sergio Godoy & Joseph Stiglitz, 2006. "Growth, Initial Conditions, Law and Speed of Privatization in Transition Countries: 11 Years Later," NBER Working Papers 11992, National Bureau of Economic Research, Inc.
    54. Walsh, Patrick Paul, 2003. "The cyclical pattern of regional unemployment flows in Poland," Economic Systems, Elsevier, vol. 27(2), pages 155-169, June.
    55. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2003. "Gross job flows in Ukraine," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 321-356, June.
    56. J. David Brown & John S. Earle, 2003. "The reallocation of workers and jobs in Russian industry," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 221-252, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    transition; job creation; job destruction; worker flows; unemployment;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:war:wpaper:2015-11. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marcin Bąba) or (Marina Grazioli). General contact details of provider: http://edirc.repec.org/data/fesuwpl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.