Job Reallocation and Productivity Growth in the Ukrainian.pdfVIP

CENTRE FOR ECONOMIC REFORM AND TRANSFORMATION School of Management and Languages, Heriot-Watt University, Edinburgh, EH14 4AS Tel: 0131 451 8143/3485 Fax: 0131 451 3498 email: ecocert@hw.ac.uk World-Wide Web: http://www.sml.hw.ac.uk/cert Job Reallocation and Productivity Growth in the * Ukrainian Transition J. David Brown‡ John Earle § October 2004 Discussion Paper 2004/07 Abstract We analyze the pace and patterns of job reallocation in Ukraine using 1992-2000 panel data on nearly the surviving universe of manufacturing firms inherited from the Soviet Union. Employment growth displays a substantial increase in heterogeneity during this transition period, with a corresponding rise in excess job reallocation. Unlike data for Soviet Russia in the 1980s, Ukrainian job reallocation in the 1990s was clearly productivity-enhancing, both within and across industries. The paper also estimates the effects of firm and market characteristics on the magnitude of reallocation and on the extent to which it has contributed to aggregate productivity growth. Keywords: job creation, job destruction, productivity decomposition, privatization, Ukraine JEL Classification: E24, J63, O47, P23 * The first version of this paper was prepared for the IZA-WDI Conference on Labor Markets in Emerging Market Economies, Costa Rica, April 2002; it was revised for the Institute for