Abstract

We analyze annual census data from 1985 to 1999 for old Russian manufacturing firms to calculate the magnitude, covariates, and productivity consequences of gross job flows before and after reforms. The job creation rate was low throughout the period but increased slightly after 1991, while job destruction, reallocation, excess reallocation, and employment growth dispersion rose markedly. The association of excess reallocation with firm size, wages, labor productivity, and capital intensity became clearly negative postreform. Job reallocation was unrelated to labor productivity growth under socialism, but recent contributions were strongly positive. Privatization and competition did not increase job flows, but they became associated with significantly higher covariance of employment growth with relative productivity, suggesting that they may have helped to focus job destruction in firms with the lowest productivity.