Labor Market Institutions and Labor Market Performance: What Can We Learn from Transition Countries?

Quaderni DSE Working Paper No. 714

51 Pages Posted: 24 Sep 2010

See all articles by Hartmut Lehmann

Hartmut Lehmann

University of Bologna - School of Economics, Management, and Statistics; IZA Institute of Labor Economics

Alexander Muravyev

Saint Petersburg Branch National Research University Higher School of Economics; Institute for the Study of Labor (IZA)

Date Written: September 7, 2010

Abstract

This paper studies the relationship between labor market institutions and policies and labor market performance using a new and unique dataset that covers the countries of Eastern Europe and Central Asia, which in the last two decades experienced radical economic and institutional transformations. We document a clear trend towards liberalization of labor markets, especially in the countries of the former Soviet Union, but also substantial differences across the countries studied. Our econometric analysis implies that institutions matter for labor market outcomes, and that deregulation of labor markets improves their performance. The analysis also suggests several significant interactions between different institutions, which are in line with the idea of beneficial effects of reform complementarity and broad reform packages. Finally, we show that there are important advantages of focusing on a broader set of labor market outcomes, and not only on the unemployment rate, which until now has been the main approach in the empirical literature

Keywords: Labor Market Institutions, Unemployment, Transition Economies

JEL Classification: E24, J21, P20

Suggested Citation

Lehmann, Hartmut F. and Muravyev, Alexander, Labor Market Institutions and Labor Market Performance: What Can We Learn from Transition Countries? (September 7, 2010). Quaderni DSE Working Paper No. 714. Available at SSRN: https://ssrn.com/abstract=1681525 or http://dx.doi.org/10.2139/ssrn.1681525

Hartmut F. Lehmann (Contact Author)

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Alexander Muravyev

Saint Petersburg Branch National Research University Higher School of Economics ( email )

Kantemirovskaya str. 3a
St. Petersburg, 194000
Russia

HOME PAGE: http://https://www.hse.ru/en/org/persons/127811036

Institute for the Study of Labor (IZA) ( email )

Schaumburg-Lippe-Str. 5-9
Bonn, D-53113
Germany

HOME PAGE: http://www.iza.org/en/webcontent/index_html

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