Constraints to growth and job creation in low-income Commonwealth of Independent States countries
AbstractDespite sustained output growth since 1997, low-income Commonwealth of Independent States (CIS) countries (CIS-7) have not experienced growth in employment, a phenomenon observed elsewhere in transitional economies and labeled as"jobless growth."The author addresses the causes of this phenomenon in the CIS-7. He argues that the lackof job creation is explained by a combination of structural factors, including capital-intensive growth, large potential for productivity gains among existing workers, and compartmentalized economies best depicted by a dual labor market framework. Agriculture and industry have performed asymmetrically and grown apart during the recession and during the growth periods. Agriculture provides subsistence and refuge from urban poverty and unemployment but is unable to grow beyond subsistence because it is disconnected from industrial manufacturing and because the agricultural infrastructure is depleted and underinvested. Industry has progressively lost its manufacturing capacity, and focuses on capital-intensive, highly productive sectors, and provides good wages for the few highly skilled workers. With governments and the international community currently refraining from investing in agricultural and industrial policies focused on reviving manufacturing, jobless growth is likely to persist.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3893.
Date of creation: 01 Apr 2006
Date of revision:
Labor Markets; Economic Theory&Research; Labor Standards; Economic Growth; Achieving Shared Growth;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-29 (All new papers)
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