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Article

Labor Reallocation and Firm Growth: Benchmarking Transition Countries Against Mature Market Economies

IZA Journal of Labor and Development. 2014. Vol. 3. No. 13.
Mitra P., Muravyev Alexander, Schaffer M.

This paper uses firm-level survey data to study labor reallocation and firm growth in the transition countries over 1996–2005, including benchmarking against developed market economies. The data shows rapid growth of the new private sector and of the micro- and small-firm sectors, with the size distribution of firms moving towards the pattern observed in comparable surveys of developed market economies. Throughout, the regional patterns suggest greater convergence in the transition countries that joined the European Union in 2004 than in the other, lower-income transition economies. We also find evidence of Kuznet-Chenery type structural change across sectors.