Labor Market Developments During Economic Transition
44 Pages Posted: 20 Apr 2016
Date Written: April 1, 2006
Abstract
The paper reviews labor market developments in the transition economies of Europe and Central Asia. It argues that the scarcity of productive job opportunities and the growing labor market segmentation are the two main labor market problems facing the transition economies. In the European transition economies the lack of jobs has led to persistent open unemployment. In the Commonwealth of Independent States (CIS) it has led to hidden unemployment (underemployment and low productivity employment). Unemployment in the European transition economies is supported by the developed social safety net. In contrast, in the CIS for most workers unemployment is not an affordable option. They either stick to their old, unproductive jobs in unrestructured enterprises, or work in the informal sector, or resort to subsistence agriculture. Thus, underemployment in the CIS is a mirror image of unemployment in the European transition economies. Accordingly, the high employment-to-population ratios in many CIS countries do not necessarily signify favorable labor market performance. Instead they often indicate delayed enterprise restructuring, the maintenance of unsustainable jobs in uncompetitive firms, and the existence of a large informal sector as an employer of last resort. Labor market segmentation has been caused by a sharp increase in earnings differentials and the attendant increase in the incidence of low-paid jobs, by the polarization of regional labor market conditions, and finally by the growth of the informal sector offering casual, low-productivity jobs. Labor market segmentation and accompanying inequalities are more pronounced in the CIS than in the European transition economies.
Keywords: Labor Markets, Labor Standards, Labor Management and Relations, Educational Policy and Planning, Work & Working Conditions
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Institutional Determinants of Labor Reallocation in Transition
By Katherine Terrell and Tito Boeri
-
By John C. Ham, Jan Svejnar, ...
-
Gross Worker and Job Flows in a Transition Economy: An Analysis of Estonia
By John Haltiwanger and Milan Vodopivec
-
Returns to Mobility in the Transition to a Market Economy
By Tito Boeri and Christopher J. Flinn
-
Gross Job Flows in Russian Industry Before and after Reforms: Has Destruction Become More Creative?
By J. David Brown and John S. Earle
-
Gross Job Flows in Russian Industry Before and after Reforms: Has Destruction Become More Creative?
By J. David Brown and John S. Earle
-
Determinants of Interregional Mobility in Russia: Evidence from Panel Data
By Yuri Andrienko and Sergei Guriev
-
Migration and Regional Adjustment to Asymmetric Shocks in Transition Economies
By Jan Fidrmuc
-
Migration and Adjustments to Shocks in Transition Economies
By Jan Fidrmuc