Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147915
Authors: 
Tyrowicz, Joanna
Van der Velde, Lucas
Svejnar, Jan
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10229
Abstract: 
From a theoretical perspective the link between the speed and scope of rapid labor reallocation and productivity growth or income inequality is ambiguous. Do reallocations with more flows tend to produce higher productivity growth? Does such a link appear at the expense of higher income inequality? We explore the rich evidence from earlier studies on worker flows in the period of massive and rapid labor reallocation, i.e. the economic transition from a centrally planned to a market-oriented economy in Central and Eastern Europe. We have collected over 450 estimates of job flows from the literature and used these inputs to estimate the short-run and long-run relationship between labor market flows, labor productivity and income inequality. We apply the tools typical for a meta-analysis to verify the empirical regularities between labor flows and productivity growth as well as income inequality. Our findings suggest only weak and short term links with productivity, driven predominantly by business cycles. However, data reveal a strong pattern for income inequality in the short-run - more churning during reallocation is associated with a level effect towards increased Gini indices.
Subjects: 
transition
job creation
job destruction
worker flows
unemployment
JEL: 
D21
D24
D92
G21
Document Type: 
Working Paper
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