Gross Job Flows in Ukraine: Size, Ownership and Trade Effects

Abstract

This paper documents and analyses gross job flows and their determinants in Ukraine using a data set of more than 2200 Ukrainian firms operating in manufacturing and non-manufacturing for the years 1998-2000. Job destruction dominates job creation in both 1999 and 2000. Another clear-cut result of our analysis is the strong positive effect of new private firms on net employment growth. We also find an inverse relationship between job reallocation and size for both manufacturing and non-manufacturing, while only in the latter sector is employment growth inversely related with size. The main focus of the paper is the effect of trade flows on employment adjustment in manufacturing. Our results show that both employment growth and job reallocation at the firm and two-digit sector level are affected by strong exposure to import competition and product market competition in export markets. These effects are more pronounced when we consider trade flows to the world at large and to the EU than when the analysis is based on trade flows to the CIS.