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Organized Labour and Restructuring: Coal Mines in the Czech Republic and Romania

In: The Labour Market Impact of the EU Enlargement. A New Regional Geography of Europe?

  • Jan Bruha

    (Economic Institute, Prague)

  • Delia Ionascu

    (University of Copenhagen)

  • Byeongju Jeong

    (Economic Institute, Prague)

We examine the role of organized labour in the restructuring experience of two coal-mining regions in the 1990s. Under similar external circumstances, the Czech Republic’s Ostrava region underwent gradual restructuring from early on whereas Romania’s Jiu Valley region went through no restructuring until 1997 followed by massive layoffs over two years. We conduct a quantitative exercise that accounts for mine productivity, labour market conditions and the constraints in compensating laid-off miners. We show that the Jiu Valley’s delay in restructuring was inefficient. Gradual restructuring with compensation would have benefited both the miners and the government. The proximate reason for the delay was the Jiu Valley miners’ action against restructuring. We discuss what motivated their action and why it was effective.

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This chapter was published in:
  • Floro Ernesto Caroleo & Francesco Pastore (ed.), 2010. "The Labour Market Impact of the EU Enlargement. A New Regional Geography of Europe?," AIEL Series in Labour Economics, AIEL - Associazione Italiana Economisti del Lavoro, number 04, December.
  • This item is provided by AIEL - Associazione Italiana Economisti del Lavoro in its series AIEL Series in Labour Economics with number 04-03.
    Handle: RePEc:ail:chapts:04-03
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    1. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, June.
    2. Acemoglu, Daron & Robinson, James A, 1999. "Inefficient Redistribution," CEPR Discussion Papers 2122, C.E.P.R. Discussion Papers.
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