Employment Developments in Central and Eastern Europe
AbstractThe present study examines the evolution of employment and labour market trends in the new EU member states (NMS), the accession countries (ACs) and the countries of Southeastern Europe (SEE) over the past decade and a half. It focuses on selected labour market indicators and compares them with developments in the EU-15. The main findings of the study are presented by country groups In the NMS and the two ACs Bulgaria and Romania, job creation remains low despite high economic growth in most countries. Hence, the employment elasticity of output growth is rather low, but varying by country. In most countries employment and activity rates declined significantly over the transition period up to the early 2000s and started to increase moderately thereafter. In general, the transition period was characterized by a de industrialization and de agrarianization process, while the services sector – market services in particular – became the main employer. Some countries, however, emerged as industrial locations, with manufacturing employment resuming growth recently. The extent of this recovery differed from country to country. Overall, new job creation in services and manufacturing has compensated for job destruction in other activities at least in some of the NMS in the past few years. In most countries the growth of unemployment has come to a halt but structural features have remained unchanged or even deteriorated. Long-term unemployment has become a serious problem in all NMS and the ACs. It has reached much higher levels than in the old EU and continues to rise in the majority of countries. Youth unemployment is particularly high in the Slovak Republic and in Poland. The labour markets in Southeast Europe (SEE) differ substantially from those in the NMS due to the delayed start of the transition, large informal sector activities, traditionally high labour migration (including brain drain) and the already high level of unemployment at the outset of transition. Employment rates are generally on the decline except in Croatia and low compared to European standards. The employment structure shows a picture diverging from that in the NMS and the EU 15, with a continued emphasis on agricultural employment, absorbing workers laid off in other sectors or providing subsistence activity due to the low job creation in the formal sector. A common feature of all countries in the region is the sharp contraction of industrial employment, reflecting the slow recovery of industry after the strong contraction in the 1990s. The services sector is underdeveloped as compared with the NMS and the EU-15. But, taking into account the large informal sector that concentrates traditionally on services sector activities (together with agriculture and construction), the information obtained from official figures seems to underestimate the actual size of that sector. Unemployment in SEE started from a much higher level than in the NMS and is now ranging between 21% in Serbia and 39% in Kosovo – Croatia being the only exception, with comparatively low and declining unemployment, at about 13%. The problem of long-term unemployment is even more severe in SEE than in the other transition countries and the proportion of those who are affected is by far higher.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The Vienna Institute for International Economic Studies, wiiw in its series wiiw Research Reports with number 332.
Length: 75 pages including 23 Tables and 27 Figures
Date of creation: Nov 2006
Date of revision:
Publication status: Published as wiiw Research Report
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brada, Josef C & King, Arthur E, 1992. " Is There a J-Curve for the Economic Transition from Socialism to Capitalism?," Economic Change and Restructuring, Springer, Springer, vol. 25(1), pages 37-53.
- Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 11(3), pages 55-74, Summer.
- Richard Jackman & C Pauna, 1997. "Labour Market Policy and the Reallocation of Labour Across Sectors," CEP Discussion Papers, Centre for Economic Performance, LSE dp0338, Centre for Economic Performance, LSE.
- Kornai Janos, 1994. "Transformational Recession: The Main Causes," Journal of Comparative Economics, Elsevier, vol. 19(1), pages 39-63, August.
- Michael Landesmann, 2000. "Structural Change in the Transition Economies, 1989 to 1999," wiiw Research Reports, The Vienna Institute for International Economic Studies, wiiw 269, The Vienna Institute for International Economic Studies, wiiw.
- Randolph Luca Bruno, 2006. "Optimal speed of transition with a shrinking labour force and under uncertainty ," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 14(1), pages 69-100, 03.
- Fazekas, Károly, 2005. "Transition of the Hungarian Labour Market: Age, Skill and Regional Differences," Discussion Paper, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University 241, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
- Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(3), pages 699-726, August.
- Buddelmeyer, Hielke & Mourre, Gilles & Ward-Warmedinger, Melanie E., 2004. "Recent Developments in Part-Time Work in EU-15 Countries: Trends and Policy," IZA Discussion Papers 1415, Institute for the Study of Labor (IZA).
- John Ham & Jan Svejnar & Katherine Terrell, 1998.
"Unemployment and the Social Safety Net During Transitions to a Market Economy: Evidence from the Czech and Slovak Republic,"
William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan
169, William Davidson Institute at the University of Michigan.
- Ham, John C & Svejnar, Jan & Terrell, Katherine, 1998. "Unemployment and the Social Safety Net during Transitions to a Market Economy: Evidence from the Czech and Slovak Republics," American Economic Review, American Economic Association, American Economic Association, vol. 88(5), pages 1117-42, December.
- Vodopivec, Milan & Worgotter, Andreas & Raju, Dhushyanth, 2003. "Unemployment benefit systems in Central and Eastern Europe : a review of the 1990s," Social Protection Discussion Papers 26307, The World Bank.
- Michael Landesmann & Hermine Vidovic & Terry Ward, 2004. "Economic Restructuring and Labour Market Developments in the New EU Member States," wiiw Research Reports, The Vienna Institute for International Economic Studies, wiiw 312, The Vienna Institute for International Economic Studies, wiiw.
- Sandrine Cazes & Alena Nesporova, 2004. "Labour markets in transition: balancing flexibility and security in Central and Eastern Europe," Revue de l'OFCE, Presses de Sciences-Po, Presses de Sciences-Po, vol. 91(5), pages 23-54.
- Edward Christie & Rostislav Kapelyushnikov & Andrei Kuznetsov & Waltraut Urban, 2010. "Monthly Report No. 2/2010," wiiw Monthly Reports, The Vienna Institute for International Economic Studies, wiiw 2010-02, The Vienna Institute for International Economic Studies, wiiw.
- Richard Jackman & C Pauna, 1997. "Labour market policy and the reallocation of labour across sectors," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 2047, London School of Economics and Political Science, LSE Library.
- Metka Stare & Andreja Jaklič, 2011. "Towards Explaining Growth of Private and Public services in the Emerging Market Economies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, Academy of Economic Studies - Bucharest, Romania, vol. 13(30), pages 581-598, June.
- Peter Havlik & Sebastian Leitner & Robert Stehrer, 2008. "Growth Resurgence, Productivity Catching-up and Labour Demand in CEECs," wiiw Statistical Reports, The Vienna Institute for International Economic Studies, wiiw 3, The Vienna Institute for International Economic Studies, wiiw.
- Vladimir Gligorov & Anna Iara & Michael Landesmann & Robert Stehrer & Hermine Vidovic, 2008. "Western Balkan Countries: Adjustment Capacity to External Shocks, with a Focus on Labour Markets," wiiw Research Reports, The Vienna Institute for International Economic Studies, wiiw 352, The Vienna Institute for International Economic Studies, wiiw.
- Alessia Lo Turco & Aleksandra Parteka, 2009. "Empirical investigation on labour market interactions in an enlarged Europe," Bank i Kredyt, National Bank of Poland, Economic Institute, National Bank of Poland, Economic Institute, vol. 40(1), pages 87-105.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Customer service).
If references are entirely missing, you can add them using this form.