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Evolution of Employment Protection Legislation in the USSR, CIS and Baltic States, 1985-2009

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  • Muravyev, Alexander

    ()
    (Higher School of Economics, Moscow)

Abstract

This paper presents and discusses new data on employment protection legislation (EPL) in the successor states of the former USSR – the CIS and Baltic states – over 25 years from 1985 to 2009. We use the OECD methodology (OECD EPL, version II) for assessing the strictness of national labor laws with respect to employers’ firing costs. In addition to the overall OECD EPL index, we present detailed statistics for 18(22) sub-indicators used for its computation. The new data allow us to make several important observations. In particular, the data do not support the widely held view that labor regulations in the former USSR with respect to firing costs were extremely rigid and were subsequently liberalized by the 15 successor states over the course of transition to a market economy. Rather, the dynamics of the EPL index in the region resembles an inverted U-shaped pattern with the peak of labor market rigidity occurring in the mid-1990s in the CIS countries and a decade later in the Baltic States. In terms of major sub-indicators, we observe a rather unusual pattern: gradual liberalization of permanent contracts on the background of increasing regulation of temporary contracts and collective dismissals. This is in sharp contrast with the OECD economies, where liberalization of temporary contracts has been the major trend in the recent decades. By now, the ex-USSR states as a group do not differ that much from the EU-15 and OECD countries in terms of the overall EPL index, although they differ considerably in terms of contributions to the overall EPL of its thee major components, namely, regulation of permanent contracts, temporary contracts, and collective dismissals. We also show that our EPL data are correlated with a number of variables characterizing economic development, progress in market-oriented reforms, and political regimes prevailing in the countries studied, which suggests potential of using the new dataset in further politico-economic research.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5365.

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Length: 59 pages
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:iza:izadps:dp5365

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Keywords: transition countries; labor market institutions; employment protection;

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References

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  1. Michele Belot & Jan Boone & Jan Van Ours, 2007. "Welfare-Improving Employment Protection," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 74(295), pages 381-396, 08.
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  6. Ricardo Lagos, 2006. "A model of TFP," Staff Report, Federal Reserve Bank of Minneapolis 345, Federal Reserve Bank of Minneapolis.
  7. Gregory, Paul R & Collier, Irwin L, Jr, 1988. "Unemployment in the Soviet Union: Evidence from the Soviet Interview Project," American Economic Review, American Economic Association, American Economic Association, vol. 78(4), pages 613-32, September.
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  11. Pradeep Mitra & Alexander Muravyev & Mark E. Schaffer, 2008. "Convergence in institutions and market outcomes: Cross-country and time-series evidence from the BEEPS surveys in transition economies," CERT Discussion Papers, Centre for Economic Reform and Transformation, Heriot Watt University 0809, Centre for Economic Reform and Transformation, Heriot Watt University.
  12. Vladimir Gimpelson & Rostislav Kapelyushnikov & Anna Lukyanova, 2010. "Employment Protection Legislation in Russia: Regional Enforcement and Labor Market Outcomes," Comparative Economic Studies, Palgrave Macmillan, vol. 52(4), pages 611-636, December.
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  17. repec:wii:bpaper:bowp:049 is not listed on IDEAS
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Citations

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Cited by:
  1. Nauro Campos & Jeffrey Nugent, 2012. "The Dynamics of the Regulation of Labor in Developing and Developed Countries since 1960," William Davidson Institute Working Papers Series wp1037, William Davidson Institute at the University of Michigan.
  2. Hazans, Mihails, 2011. "What explains prevalence of informal employment in European countries : the role of labor institutions, governance, immigrants, and growth," Policy Research Working Paper Series 5917, The World Bank.
  3. Hartmut Lehmann & Alexander Muravyev & Tiziano Razzolini & Anzelika Zaiceva, 2011. "The Wage and Non-wage Costs of Displacement: Evidence from Russia," Center for Economic Research (RECent), University of Modena and Reggio E., Dept. of Economics 060, University of Modena and Reggio E., Dept. of Economics.
  4. Hazans, Mihails, 2011. "Informal workers across Europe : evidence from 30 European countries," Policy Research Working Paper Series 5912, The World Bank.
  5. Vladimir Gimpelson & Aleksey Oshchepkov, 2012. "Does more unemployment cause more fear of unemployment?," IZA Journal of Labor & Development, Springer, Springer, vol. 1(1), pages 1-26, December.
  6. Lehmann, Hartmut & Muravyev, Alexander, 2011. "Labor Markets and Labor Market Institutions in Transition Economies," IZA Discussion Papers 5905, Institute for the Study of Labor (IZA).
  7. 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).
  8. Daniel Arnold, 2012. "Benefit Morale and Cross-Country Diversity in Sick Pay Entitlements," IAAEU Discussion Papers, Institute of Labour Law and Industrial Relations in the European Union (IAAEU) 201211, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

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