Employment Determination in Enterprises under Communism and in Transition: Evidence from Central Europe
AbstractIn this paper, we present a comparative analysis of employment determination in four transition economies as they move from central planning to a market economy in the early 1990s. We use firm level panel data sets from the Czech Republic, Hungary, Poland and Slovakia to estimate dynamic employment equations for the period immediately before and after the start of transition. We find evidence that firms behave for the most part as if they were on their labor demand curves, with little evidence of labor hoarding. There were significant cross-country variations in the determinants of employment during the reform process however. Hungarian and Polish firms started the transition already substantially reformed, and became even more responsive to market signals as transition proceeded. In contrast, firms in the Czech and Slovak republics started in the completely unresponsive mode characteristic of central planning, but rapidly caught up with their counterparts in Hungary and Poland.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1370.
Length: 33 pages
Date of creation: Oct 2004
Date of revision:
Publication status: published in: Industrial and Labor Relations Review, 2005, 58 (3), 353-369
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Other versions of this item:
- Swati Basu & Saul Estrin & Jan Svejnar, 2005. "Employment determination in enterprises under communism and in transition: Evidence from Central Europe," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(3), pages 353-369, April.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
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