The transition from plan to market has hinged on the development of a dynamic private sector that would serve as the engine of growth and employment creation. This paper examines the link between the availability of skilled workers and the creation of new private firms. Using a dynamic search...

This paper examines the impact of on-the-job search by workers in the state sector on the level and duration of unemployment in transition economies. We derive the optimal speed of state sector closure when workers engage in on-the-job search