Earle, John S.Brown, J. David2012-06-212012-06-212006-04https://hdl.handle.net/10986/8723The challenge for labor market policy in the transition economies has been to redress the sharp drops in employment and rises in unemployment in a way that fosters the creation of productive jobs. The authors first document the magnitude and productivity of job and worker reallocation. Then they investigate the effects of privatization, product and labor market liberalization, and obstacles to growth in the new private sector on reallocation and its productivity in Hungary, Romania, Russia, and Ukraine. The authors find that market reform has resulted in a large increase in the pace of job reallocation, particularly that occurring between sectors and through firm turnover. Unlike under central planning, the job reallocation during the transition has contributed significantly to aggregate productivity growth. Privatization has not only stimulated intrasectoral job reallocation, but the reallocation is more productive than that among remaining state firms. The effect of privatization on firm productivity varies considerably across countries and is not always positive. The productivity gains from privatization have generally not come at the expense of workers but are rather associated with increased wages and employment.CC BY 3.0 IGOADJUSTMENT COSTSAFFECTED WORKERSAGGREGATE PRODUCTIVITYAGGREGATE PRODUCTIVITY GROWTHATTRITIONBENEFITS FROM PRIVATIZATIONBENEFITS OF PRIVATIZATIONBUREAUCRATIC INTERFERENCEBUSINESS ENVIRONMENTBUSINESS PLANCASH FLOWCENTRAL ASIANCENTRAL PLANNINGCOMPANYCOMPETITIVE INDUSTRIESCOMPETITIVE PRESSURESCOMPETITIVE SECTORSCOMPETITIVENESSCOMPETITORSCONTINUED EMPLOYMENTCONTRACT ENFORCEMENTCORPORATE GOVERNANCECREATIVE DESTRUCTIONDOMESTIC EQUITY MARKETSDOMESTIC INVESTORSDOMESTIC SAVINGSDOMINANT EMPLOYERSDOWNSIZINGECONOMIC POLICYECONOMIC SECTORSECONOMIC TRANSITIONECONOMIES OF SCALEEFFECT ON EMPLOYMENTEMPLOYEEEMPLOYEE OWNERSHIPEMPLOYMENTEMPLOYMENT GROWTHEMPLOYMENT LEVELEMPLOYMENT LEVELSEMPLOYMENT OPPORTUNITIESEMPLOYMENT POLICYEMPLOYMENT RATEEMPLOYMENT RATESEMPLOYMENT RESEARCHEMPLOYMENT SIZEENTREPRENEURSEXCESS DEMANDEXECUTIVE DIRECTORSFINANCIAL CRISISFINANCIAL MARKETSFIRM GROWTHFIRM PERFORMANCEFIRM PRODUCTIVITYFIRM SIZEFIRM SURVEYFIRM TURNOVERFOREIGN INVESTORSFOREIGN OWNERSHIPFOREIGN-OWNED FIRMSHARD BUDGET CONSTRAINTSHIGH EMPLOYMENTHUMAN CAPITALIMPACT OF PRIVATIZATIONINCUMBENT WORKERSINDUSTRIAL ENTERPRISESINSTITUTIONAL ENVIRONMENTINTERNATIONAL STANDARDSJOB CREATIONJOB DESTRUCTIONJOB FLOWSJOBSLABOR FORCELABOR MARKETLABOR MARKET POLICIESLABOR MARKET POLICYLABOR MARKET VARIABLESLABOR MARKETSLABOR REALLOCATIONLAYOFFLEGAL ENTITIESLEGAL ENTITYLOCAL NETWORKSMANAGERIAL OWNERSHIPMANDATORY SEVERANCEMANDATORY SEVERANCE PAYMARKET ECONOMYMARKET MECHANISMSMARKET SHAREMASS LAYOFFSMASS PRIVATIZATIONMASS PRIVATIZATION PROGRAMSNET EMPLOYMENTOPEN UNEMPLOYMENTORGANIZATIONAL STRUCTUREOWNERSHIP CONCENTRATIONOWNERSHIP STRUCTUREOWNERSHIP STRUCTURESPLANNED ECONOMIESPOSITIVE EFFECTSPREVIOUS ONEPRIVATE FIRMSPRIVATE OWNERSPRIVATE OWNERSHIPPRIVATE SECTORPRIVATIZATIONPRIVATIZATION DATAPRIVATIZATION METHODPRIVATIZATION METHODSPRIVATIZATION POLICYPRIVATIZATION TRANSACTIONSPRIVATIZATIONSPRODUCING GOODSPRODUCT MARKETPRODUCT MARKET COMPETITIONPRODUCT MARKETSPRODUCT MIXPRODUCTIVE FIRMSPRODUCTIVITY BENEFITPRODUCTIVITY DATAPRODUCTIVITY EFFECTPRODUCTIVITY EFFECTSPRODUCTIVITY GAINSPRODUCTIVITY IMPROVEMENTSPRODUCTIVITY INCREASESPROFIT MAXIMIZATIONPROPERTY RIGHTSREAL WAGESSALES CONTRACTSSHARE OF PRIVATIZATIONSMALL ENTERPRISESSMALL FIRMSSOFT BUDGET CONSTRAINTSSTATE CONTROLSTATE FIRMSSTATE OWNERSHIPTECHNICAL ASSISTANCETOTAL WORKERTRAINING COSTSTRANSITION ECONOMIESTYPES OF PRIVATIZATIONUNEMPLOYEDUNEMPLOYED WORKERSUNEMPLOYMENTVALUATIONWAGE GROWTHWITHIN-FIRM PRODUCTIVITY GROWTHWORKERWORKERSWorld Bank10.1596/1813-9450-3886