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Labor Market Institutions and Unemployment Dynamics in Transition Economies

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Author Info
Pietro Garibaldi (International Monetary Fund)
Zuzana Brixiova (International Monetary Fund)

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Abstract

This paper propses and solves a matching model of job reallocation between the public and private sector, and it shows that cross country differences in labor market institutions are broadly consistent with the dynamics of unemployment and real wages in transition economies. Two main results arise form the analysis. First, higher unemployment benefits speed up job destruction in the state sector and private job creation at the early stages of transition, but they increase unemployment in the long run. Second, higher minimum wages can theoretically speed up the reallocation process without affecting the long run equilibrium. Copyright 1998, International Monetary Fund

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File URL: http://www.imf.org/external/pubs/ft/staffp/1998/06-98/pdf/garibald.pdf
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Publisher Info
Article provided by Palgrave Macmillan Journals in its journal IMF Staff Papers.

Volume (Year): 45 (1998)
Issue (Month): 2 ()
Pages: 3
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Handle: RePEc:pal:imfstp:v:45:y:1998:i:2:p:3

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Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

Cited by:
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  1. Boeri, Tito, 2001. "Transition with Labour Supply," IZA Discussion Papers 257, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Ana Lamo & Julian Messina & Etienne Wasmer, 2007. "Are Specific Skills an Obstacle to Labor Market Adjustment? Theory and an Application to the EU Enlargement," CSEF Working Papers 172, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
    Other versions:
  3. Irena Grosfeld & Claudia Senik-Leygonie & Thierry Verdier & Stanislav Kolenikov & Elena Paltseva, 1999. "Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation," William Davidson Institute Working Papers Series 246, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  4. Randolph Luca Bruno, 2003. "Speed of Transition, Unemployment Dynamics and Nonemployment Policies: Evidence from the Visegrad Countries," LEM Papers Series 2003/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
  5. Maxim Bouev, 2004. "Diverging Paths: Transition in the Presence of the Informal Sector," William Davidson Institute Working Papers Series 2004-689, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  6. Hubert Gabrisch & Herbert Buscher, 2005. "The unemployment-growth relationship in transition countries," IWH Discussion Papers 5-05, Halle Institute for Economic Research. [Downloadable!]
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