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Unemployment Benefit Systems in Central and Eastern Europe: A Review of the 1990s1


  • Milan Vodopivec

    () (The World Bank, Washington, DC, USA.)

  • Andreas Wörgötter

    (OECD, Paris)

  • Dhushyanth Raju

    (Cornell University, Ithaca, NY, USA)


The paper provides an overview of unemployment benefit systems in Central and Eastern Europe during the 1990s. It describes their institutional features (eligibility, the level and duration of benefits, and special rules), discusses issues arising in their implementation, and examines their performance. Income protection effects, derived from the empirical analysis of household income and expenditures surveys, pertain to the coverage, the average size of benefits in household income, and the targeting of benefits. Efficiency effects, obtained from a literature review, are related to the effects of benefits on the duration of unemployment spell, restructuring, and overall unemployment and employment rates. The evidence shows that (i) unemployment benefits were progressive; (ii) that, in countries with broad coverage and sizeable share of benefits in household incomes, they strongly reduced poverty; and (iii) that, similar to findings for developed economies, they created work disincentives. Comparative Economic Studies (2005) 47, 615–651. doi:10.1057/palgrave.ces.8100062

Suggested Citation

  • Milan Vodopivec & Andreas Wörgötter & Dhushyanth Raju, 2005. "Unemployment Benefit Systems in Central and Eastern Europe: A Review of the 1990s1," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 47(4), pages 615-651, December.
  • Handle: RePEc:pal:compes:v:47:y:2005:i:4:p:615-651

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    References listed on IDEAS

    1. Jan C. van Ours & Milan Vodopivec, 2006. "How Shortening the Potential Duration of Unemployment Benefits Affects the Duration of Unemployment: Evidence from a Natural Experiment," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 351-378, April.
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    Cited by:

    1. Milan Vodopivec, 2010. "How Viable are Unemployment Insurance Savings Accounts? Simulation Results for Slovenia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 52(2), pages 225-247, June.
    2. Robalino, David & Vodopivec, Milan & Bodor, Andras, 2009. "Savings for unemployment in good or bad times : options for developing countries," Social Protection and Labor Policy and Technical Notes 50320, The World Bank.
    3. Tamar Khitarishvili, 2013. "The Economic Crisis of 2008 and the Added Worker Effect in Transition Countries," Economics Working Paper Archive wp_765, Levy Economics Institute.
    4. Vodopivec, Milan, 2008. "How Viable Are Unemployment Insurance Savings Accounts: Simulation Results for Slovenia," IZA Discussion Papers 3438, Institute for the Study of Labor (IZA).
    5. El-hadj Bah & Josef C. Brada, 2014. "Labor Markets in the Transition Economies: An Overview," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(1), pages 3-53, June.
    6. Zuzana Brixiova, 2009. "Labour Market Flexibility In Estonia: What More Can Be Done?," William Davidson Institute Working Papers Series wp964, William Davidson Institute at the University of Michigan.
    7. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    8. Alexei Izyumov, 2010. "Human Costs of Post-communist Transition: Public Policies and Private Response," Review of Social Economy, Taylor & Francis Journals, vol. 68(1), pages 93-125.
    9. Primož Dolenc & Suzana Laporšek, 2012. "Taxing wages and sustainable labour market performance: empirical evidence from OECD and EU countries," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 4(3), pages 234-253.
    10. Primoz Dolenc & Suzana Laporsek, 2012. "Labour Taxation and Its Impact on Employment Growth," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 10(3 (Fall)), pages 301-318.
    11. Holzmann, Robert & Pouget, Yann & Vodopivec, Milan & Weber, Michael, 2011. "Severance pay programs around the world : history, rationale, status, and reforms," Social Protection and Labor Policy and Technical Notes 62726, The World Bank.
    12. Amine Samir, 2016. "The Canadian Unemployment Insurance Generosity: Reflections from a Comparative Analysis," Comparative Economic Research, De Gruyter Open, vol. 19(3), pages 133-145, September.
    13. Margolis, David N. & Navarro, Lucas & Robalino, David A., 2012. "Unemployment Insurance, Job Search and Informal Employment," IZA Discussion Papers 6660, Institute for the Study of Labor (IZA).
    14. Milan Vodopivec, 2006. "Choosing a System of Unemployment Income Support: Guidelines for Developing and Transition Countries," World Bank Research Observer, World Bank Group, vol. 21(1), pages 49-89.
    15. Alexei Izyumov & Trista Claxon, 2009. "Models of Capitalism and Income Distribution in Transition Economies: A Comparative Perspective," Journal of Economic Issues, Taylor & Francis Journals, vol. 43(3), pages 733-758.
    16. Vodopivec, Milan & Tong, Minna Hahn, 2008. "China : improving unemployment insurance," Social Protection and Labor Policy and Technical Notes 44779, The World Bank.
    17. Primož Dolenc & Suzana Laporšek, 2010. "Tax Wedge on Labour and its Effect on Employment Growth in the European Union," Prague Economic Papers, University of Economics, Prague, vol. 2010(4), pages 344-358.
    18. Lucia Kureková, 2013. "Welfare Systems as Emigration Factor: Evidence from the New Accession States," Journal of Common Market Studies, Wiley Blackwell, vol. 51(4), pages 721-739, July.

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