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Organized Labor and Restructuring: Coal Mining in the Czech Republic and Romania (in English)

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Abstract

The authors examine the role of organized labor in the restructuring experience of two coal-mining regions in the Czech Republic and Romania in the 1990s. Under similar external circumstances, the Ostrava region of the Czech Republic undertook early gradual restructuring, whereas the Jiu Valley region in Romania did not undertake restructuring until 1997, which was followed by massive layoffs in the sector. The authors conduct a quantitative exercise that accounts for mine productivity, labor-market conditions, and constraints in compensating laid-off miners. They show that the belated restructuring in the Jiu Valley was inefficient: gradual restructuring with reasoned compensation would have benefited both the miners and the state. An important factor in the delayed restructuring was the miners’ resistance to it. The authors discuss what motivated the miners’ opposition and the consequences.

Suggested Citation

  • Jan Bruha & Delia Ionascu & Byeongju Jeong, 2007. "Organized Labor and Restructuring: Coal Mining in the Czech Republic and Romania (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(5-6), pages 272-291, August.
  • Handle: RePEc:fau:fauart:v:57:y:2007:i:5-6:p:272-291
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    File URL: http://journal.fsv.cuni.cz/storage/1076_fau_5_6_2007_00000000074.pdf
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    References listed on IDEAS

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    1. Jose E. Galdon Sanchez & James A. Schmitz, 2003. "Competitive pressure and labor productivity: world iron ore markets in the 1980s," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 9-23.
    2. Dewatripont, Mathias & Roland, Gerard, 1995. "The Design of Reform Packages under Uncertainty," American Economic Review, American Economic Association, vol. 85(5), pages 1207-1223, December.
    3. Castanheira, Micael & Roland, Gerard, 2000. "The Optimal Speed of Transition: A General Equilibrium Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 219-239, February.
    4. Linden, Ronald H., 1986. "Socialist patrimonialism and the global economy: the case of Romania," International Organization, Cambridge University Press, vol. 40(02), pages 347-380, March.
    5. Acemoglu, Daron & Robinson, James A., 2001. "Inefficient Redistribution," American Political Science Review, Cambridge University Press, vol. 95(03), pages 649-661, September.
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    More about this item

    Keywords

    coal; organized labor; restructuring; transition; welfare;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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