Labour reallocation over the business cycle during transition and post-transition period: the case of Poland

Stanisław Cichocki

Warsaw International Economic Meeting, 03.07.2015

Group for Research in Applied Economics

Outline

1. Motivation

2. Literature review

3. Data and method

4. Results

5. Conclusions

2

Motivation

• Two feautres of labour reallocation during transition:

• Public vs. private sector

• Manufacturing vs. services

• Significant amount of literature for EE and FSU countries but…

• Focuses on early transition period

• Uses yearly data only

• No behavior over the business cyclebusiness cycle

3

Literature review

• Theoretical background:

• Aghion and Blanchard (1994)

• Caballero and Hammour (1996, 1998, 2000)

• Empirical studies:

• Multiple countries studies (Bilsen and Konings, 1998; Faggio and Konings, 2003);

• Single country studies (Haltiwanger and Vodopivec, 2002; De Loecker and Konings 2006)

4

Literature review

• Main results:

• High job destruction rates in state owned enterprises and privatized firms

• High job creation rates in de novo created firms in private sector

• Job destruction high in manufacturing, job creation high in services

5

Data and method

• LFS for period: 1995q1-2012q4

• Types flows

• Flows from public to private sector (AB)

• Flows from manufacturing to service sector (CH)

• Flows from manufacturing in public sector to services in private sector (ABCH)

• Youth employment entry

• Elderly employment exit

6

Results: service sector

7

Results: manufacturing sector

8

Results: public sector

9

Results: AB, CH and ABCH flows

10

Results: Youth entry and elderly exit

11

Results: Services – cyclical patterns

12

Results: Manufacturing– cyclical patterns

13

Results: Public sector – cyclical patterns

14

Results: AB – cyclical patterns

15

Results: CH – cyclical patterns

16

Results: ABCH – cyclical patterns

17

Results: Youth – cyclical patterns

18

Results: Elderly– cyclical patterns

19

Conclusions

• Two features of labour reallocation in EE and FSU countries

• Job created in service sector, destructed in public sector

• Gross flows in service and manufacturing sector procyclical, weak link between business cycle and public sector employment

• CH flows procyclical

• Weak link between business cycle and AB, ABCH flows

• Youth employment entry and elderly employment exit procyclical

20

Thank you for your attention! Author: Stanisław Cichocki e-mail: scichocki@wne.uw.edu.pl

More about our research on

http://grape.uw.edu.pl

Twitter: @GrapeUW