Where Have All the Jobs Gone? Gross Job Flows in Estonia

University of Tartu Economics and Business Administration Working Paper No. 28-2004

46 Pages Posted: 3 Nov 2004

See all articles by Jaan Masso

Jaan Masso

University of Tartu - Faculty of Economics and Business Administration

Raul Eamets

University of Tartu - Faculty of Economics and Business Administration; IZA Institute of Labor Economics

Kaia Philips

University of Tartu

Date Written: September 19, 2004

Abstract

This paper documents and analyses gross job flows and their determinants in Estonia over the years 1995-2001, using a unique database from the Estonian Business Registry. This database contains all (including also micro and small firms) officially registered firms in Estonia, the total number being almost 52,000. There are several important findings in the paper. Our results show that job flows (job creation and job destruction rates) have been extremely high in Estonia and are comparable to the levels documented for the US. These rates have not decreased recently, although worker flows (transitions between labour market states) have dropped. We also found that the firm-specific component in job flows excess of employment change had relatively lower importance than in western studies due to the emergence of small and medium-sized enterprises and labour reallocation between the economic sectors. The high inter-sectoral mobility has helped maintain high levels of job flows, while both are high also due to a favourable institutional environment, especially due to low start-up costs and a large share of micro enterprises in Estonia.

Keywords: Job creation, job destruction, labour reallocation, Estonia

JEL Classification: J6, P2, L11

Suggested Citation

Masso, Jaan and Eamets, Raul and Philips, Kaia, Where Have All the Jobs Gone? Gross Job Flows in Estonia (September 19, 2004). University of Tartu Economics and Business Administration Working Paper No. 28-2004, Available at SSRN: https://ssrn.com/abstract=612741 or http://dx.doi.org/10.2139/ssrn.612741

Jaan Masso (Contact Author)

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Road 4-A110
Tartu 51009
Estonia
+ 372 7 375 842 (Phone)

Raul Eamets

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Road 4-A210
Tartu 51009
Estonia
+ 372 7 376 334 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Kaia Philips

University of Tartu ( email )

Ülikooli 18
Tartu 50090, 50090
Estonia

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