Labour Markets in the Baltic States During the Crisis 2008-2009: The Effect on Different Labour Market Groups

The University of Tartu Faculty of Economics and Business Administration Working Paper No. 79

86 Pages Posted: 5 Jan 2011

See all articles by Jaan Masso

Jaan Masso

University of Tartu - Faculty of Economics and Business Administration

Kerly Krillo

The University of Tartu FEBA

Date Written: January 3, 2011

Abstract

The economies of the Baltic States have been among the most severely affected by the global economic crisis that started in 2008. This study focuses on the impact of the crisis on the labour markets of the Baltic States with particular emphasis on how the impact varies across different labour market segments. Labour input has been decreased primarily through external adjustment (employment cuts), though part-time employment has emerged as well; wages have been flexible downward throughout the different parts of the economy. Adjustments can be seen both in the private and public sectors (the latter especially in Latvia). At the level of individual companies, quite different adjustment strategies can be seen. Similar to other European countries, males have suffered especially, but also youth and Estonia’s and Latvia’s substantial non-native (Russian-speaking) populations. Wage inequality has somewhat increased and that seems to be primarily due to the increasing premium for education and differences in wage reductions across sectors and firms. During the crisis, expenditures on both passive and active measures have grown significantly, also thanks to the use of EU funds.

Keywords: labour market, economic crisis, employment dynamics, wage differentials, Baltic States

JEL Classification: E32, J21, J31, J63, O5

Suggested Citation

Masso, Jaan and Krillo, Kerly, Labour Markets in the Baltic States During the Crisis 2008-2009: The Effect on Different Labour Market Groups (January 3, 2011). The University of Tartu Faculty of Economics and Business Administration Working Paper No. 79 , Available at SSRN: https://ssrn.com/abstract=1734378 or http://dx.doi.org/10.2139/ssrn.1734378

Jaan Masso (Contact Author)

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Road 4-A110
Tartu 51009
Estonia
+ 372 7 375 842 (Phone)

Kerly Krillo

The University of Tartu FEBA ( email )

Narva Road 4 - A110
Tartu, 51009
Estonia

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