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Labor market institutions and labor market performance: what can we learn from transition countries?

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  • H. Lehmann
  • A. Muravyev

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.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number 714.

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Date of creation: Sep 2010
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Handle: RePEc:bol:bodewp:714

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References

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  1. Belot, M.V.K. & Ours, J.C. van, 2001. "Unemployment and labor market institutions: An empirical analysis," Open Access publications from Tilburg University urn:nbn:nl:ui:12-89213, Tilburg University.
  2. Tito Boeri & Katherine Terrell, 2001. "Institutional Determinants of Labor Reallocation in Transition," William Davidson Institute Working Papers Series 384, William Davidson Institute at the University of Michigan.
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  4. Eichhorst, Werner & Feil, Michael & Braun, Christoph, 2008. "What Have We Learned? Assessing Labor Market Institutions and Indicators," IZA Discussion Papers 3470, Institute for the Study of Labor (IZA).
  5. Fiori, Giuseppe & Nicoletti, Giuseppe & Scarpetta, Stefano & Schiantarelli, Fabio, 2007. "Employment Outcomes and the Interaction Between Product and Labor Market Deregulation: Are They Substitutes or Complements?," IZA Discussion Papers 2770, Institute for the Study of Labor (IZA).
  6. H. Lehmann & J. Kluve, 2008. "Assessing Active Labor Market Policies in Transition Economies," Working Papers 646, Dipartimento Scienze Economiche, Universita' di Bologna.
  7. Alexander Muravyev, 2008. "Human capital externalities," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 16(3), pages 415-443, 07.
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Cited by:
  1. Raul Eamets, 2013. "Labour market and labour market policies during great recession: the case of Estonia," IZA Journal of European Labor Studies, Springer, Springer, vol. 2(1), pages 1-25, December.
  2. H. Lehmann & A. Muravyev, 2011. "Labor markets and labor market institutions in transition economies," Working Papers wp783, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. Sandrine Levasseur, 2011. "labour markets adjustments in Estonia during the global crisis," Documents de Travail de l'OFCE, Observatoire Francais des Conjonctures Economiques (OFCE) 2011-25, Observatoire Francais des Conjonctures Economiques (OFCE).
  4. H. Lehmann & A. Muravyev & T. Razzolini & A. Zaiceva, 2011. "The Wage and Non-wage Costs of Displacement: Evidence from Russia," Working Papers wp734, Dipartimento Scienze Economiche, Universita' di Bologna.
  5. Lehmann, Hartmut & Muravyev, Alexander & Razzolini, Tiziano & Zaiceva, Anzelika, 2010. "The Costs of Job Loss in Russia," IZA Discussion Papers 5415, Institute for the Study of Labor (IZA).
  6. Cristiano Perugini & Ekaterina Selezneva, 2013. "Labour Market Institutions, Crisis and Gender Earnings Gap in Eastern Europe," Working Papers, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies) 328, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  7. Muravyev, Alexander & Berezinets, Irina & Ilina, Yulia, 2012. "Корпоративные Конфликты И Политика Фирм В Области Занятости И Заработной Платы
    [Corporate Governance Conflicts and Employment and
    ," MPRA Paper 40215, University Library of Munich, Germany.

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