The Impact on Structural Reforms on Employment Growth and Labour Productivity: Evidence from Bulgaria and Romania

Ralitza Dimova (ralitza.dimova@manchester.ac.uk)

William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: Using firm-level data from Bulgaria and Romania, this paper addresses a lacuna in the transition literature, namely, the link of firm-level employment turnover with firm-level growth in labour productivity. The results suggest that while net job creation at the firm level was affected by privatization in Bulgaria, privatization in Romania did not have any effect on firm-level employment growth. Further, Olley-Pakes (1996) decomposition indicates that in Bulgaria, over time, resources moved from less productive firms to more productive firms in almost all industries, but that in Romania such a phenomenon was observed in less than half of the industries. At the same time, the Grilliches-Regev (1995) decomposition indicates that in both these countries mobility of labour across firms, i.e., the process of job creation and job destruction at the firm level, contributed more to productivity changes than did other firm-level characteristics and industry-level factors affecting productivity. Finally, we find that the rate of employment changes in Bulgarian firms has a significant impact on the country’s firm-level productivity changes. Regressions using Romania data, however, do not provide any support for this observation.

Keywords: job flows; employment growth; labour productivity; Bulgaria; Romania (search for similar items in EconPapers)
JEL-codes: J63 L21 L25 L33 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2003-08-01
New Economics Papers: this item is included in nep-eec and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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