The Changing Demand for Skills: Evidence from the Transition

Abstract

Transition has involved major job destruction and creation. This paper examines the skill content of these changes using a detailed three country firm survey. It shows that transition has exerted a strong bias against unskilled labour who have lost employment disproportionately. Moreover, job creation in new firms tends to be biased against workers with low educational attainments and skills. The skill content of blue collar work has also shifted upwards. Although there is variation across the sampled countries, these appear to be common features. They will have major longer run implications for the level and structure of employment and for inequality through the distribution of earnings.

Keywords: job reallocation, human capital, transition, Hungary, Romania, Russia

JEL Classification: J21, J23, J63, P31