Economic Restructuring, Unemployment, and Growth in a Transition Economy
AbstractThis paper develops a model of the process of reallocation of labor from the state sector to the private sector. When growth is exogenously determined, we show that in the initial stages of transition unemployment will rise. After a critical stage in the transition process, restructuring is accompanied by a decline in unemployment. When growth is endogenously determined, and human capital is acquired by learning-by-doing, we show that whether or not restructuring eventually occurs is determined by the level of human capital in the private sector and the rate of unemployment. The effects of various shocks and government policies on the costs, speed, and eventual outcome of restructuring are analyzed.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.
Volume (Year): 40 (1993)
Issue (Month): 4 (December)
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Other versions of this item:
- KornÃ©lia KrajnyÃ¡k & Bankim Chadha & Fabrizio Coricelli, 1993. "Economic Restructuring, Unemployment, and Growth in a Transition Economy," IMF Working Papers 93/16, International Monetary Fund.
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- P2 - Economic Systems - - Socialist Systems and Transition Economies
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