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Labor market institutions and labor market performance: what can we learn from transition countries?

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  • H. Lehmann
  • A. Muravyev

Abstract

This paper studies the relationship between labor market institutions and policies and labor market performance using a new and unique dataset that covers the countries of Eastern Europe and Central Asia, which in the last two decades experienced radical economic and institutional transformations. We document a clear trend towards liberalization of labor markets, especially in the countries of the former Soviet Union, but also substantial differences across the countries studied. Our econometric analysis implies that institutions matter for labor market outcomes, and that deregulation of labor markets improves their performance. The analysis also suggests several significant interactions between different institutions, which are in line with the idea of beneficial effects of reform complementarity and broad reform packages. Finally, we show that there are important advantages of focusing on a broader set of labor market outcomes, and not only on the unemployment rate, which until now has been the main approach in the empirical literature.

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  • H. Lehmann & A. Muravyev, 2010. "Labor market institutions and labor market performance: what can we learn from transition countries?," Working Papers 714, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:714
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    Cited by:

    1. Cristiano Perugini & Ekaterina Selezneva, 2015. "Labour market institutions, crisis and gender earnings gap in Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(3), pages 517-564, July.
    2. Drishti, Elvisa & Kalaj, Ermira Hoxha & Kopliku, Bresena Dema, 2021. "Efficiency and Distributional Effects of the Two-Tracked Labor Market Institutions in Albania," GLO Discussion Paper Series 837, Global Labor Organization (GLO).
    3. Lehmann, Hartmut & Muravyev, Alexander & Razzolini, Tiziano & Zaiceva, Anzelika, 2013. "The wage and non-wage costs of displacement in boom times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1184-1201.
    4. Sandrine Levasseur, 2011. "Labour market adjustments in Estonia during the global crisis," SciencePo Working papers Main hal-01069525, HAL.
    5. Michal Pilc, 2015. "What Determines The Reforms Of Employment Protection Legislation? A Global Perspective," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 10(4), pages 111-129, December.
    6. Drishti, Elvisa, 2021. "Cross-national comparison of job types: analysis using the EU LFS and Albanian LFS," GLO Discussion Paper Series 795, Global Labor Organization (GLO).
    7. Johannes Koettl & Olga Kupets & Anna Olefir & Indhira Santos, 2014. "In search of opportunities? The barriers to more efficient internal labor mobility in Ukraine," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-28, December.
    8. Raul Eamets, 2013. "Labour market and labour market policies during great recession: the case of Estonia," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-25, December.
    9. David Robalino & Michael Weber, 2013. "Designing and implementing unemployment benefit systems in middle and low income countries: beyond risk-pooling vs savings," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-20, December.
    10. Hartmut Lehmann & Alexander Muravyev & Tiziano Razzolini & Anzelika Zaiceva, 2011. "The Wage and Non-wage Costs of Displacement: Evidence from Russia," Center for Economic Research (RECent) 060, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    11. Lehmann, Hartmut & Muravyev, Alexander, 2011. "Labor Markets and Labor Market Institutions in Transition Economies," IZA Discussion Papers 5905, Institute of Labor Economics (IZA).
    12. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09iak4591pm is not listed on IDEAS
    13. Muravyev, Alexander & Berezinets, Irina & Ilina, Yulia, 2012. "Корпоративные Конфликты И Политика Фирм В Области Занятости И Заработной Платы [Corporate Governance Conflicts and Employment and Wage Policies of Companies]," MPRA Paper 40215, University Library of Munich, Germany.
    14. Indermit Gill & Johannes Koettl & Truman Packard, 2013. "Full employment: a distant dream for Europe," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-34, December.
    15. Lehmann, Hartmut & Muravyev, Alexander & Razzolini, Tiziano & Zaiceva, Anzelika, 2010. "The Costs of Job Loss in Russia," IZA Discussion Papers 5415, Institute of Labor Economics (IZA).
    16. Emilie Jašová & Klára Čermáková & Božena Kadeřábková & Pavel Procházka, 2016. "Působení institucionálních faktorů na strukturální a cyklickou nezaměstnanost v zemích Visegrádské skupiny [Influence of Institutional Factors on Structural and Cyclical Unemployment in the Countri," Politická ekonomie, Prague University of Economics and Business, vol. 2016(1), pages 34-50.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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