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Unemployment And Unemployment Protection In Transition Economies


  • Vera Brusentsev

    () (Department of Economics,University of Delaware)

  • Wayne Vroman

    () (The Urban Institute, Washington, DC)


Nearly twenty years have passed since the transition from a centrally-planned towards a market-oriented economy in the countries of Central and Eastern Europe and the Former Soviet Union (CEE-FSU). This paper documents the differing patterns of unemployment during the period 1990 to 2006 in the 28 countries that constitute the CEE-FSU group and outlines how unemployment protection programs developed in response. We also suggest some tentative explanations for the observed trends in unemployment and unemployment compensation. Our approach is novel in that we compare the performance of the CEE-FSU group to the worldwide average and to other major economies. In addition, we demonstrate important contrasts across the CEE-FSU sub-regions. Similar to other research in the area, this paper demonstrates significantly below-average income growth between 1990 and 1995 but then significantly above-average growth in the years since 1995 when compared with the worldwide average. We also show a significant link between output growth and employment growth for many individual countries from the region. The transition economies developed new institutions to measure and offset the effects of the new phenomenon of open unemployment. The majority instituted labor force surveys to measure unemployment and all but one (Tajikistan) established unemployment compensation (UC) programs. Our analysis of unemployment rates finds that they have been high in many of these countries but, when placed within a global context, the CEE-FSU averages during 1994-1996 and again during 2004-2006 were only somewhat higher than the average unemployment rates in other major countries with labor surveys.

Suggested Citation

  • Vera Brusentsev & Wayne Vroman, 2008. "Unemployment And Unemployment Protection In Transition Economies," Working Papers 08-15, University of Delaware, Department of Economics.
  • Handle: RePEc:dlw:wpaper:08-15.

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    References listed on IDEAS

    1. J. David Brown & John S. Earle & Almos Telegdy, 2006. "The Productivity Effects of Privatization: Longitudinal Estimates from Hungary, Romania, Russia, and Ukraine," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 61-99, February.
    2. Faggio, Giulia, 2007. "Job destruction, job creation and unemployment in transition countries: what can we learn?," LSE Research Online Documents on Economics 19716, London School of Economics and Political Science, LSE Library.
    3. Wayne Vroman & Vera Brusentsev, 2005. "Unemployment Compensation Throughout the World: A Comparative Analysis," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number uctw, November.
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    Cited by:

    1. Kuddo, Arvo, 2009. "Employment services and active labor market programs in Eastern European and Central Asian countries," Social Protection and Labor Policy and Technical Notes 51253, The World Bank.
    2. Kuddo, Arvo, 2009. "Labor laws in Eastern European and Central Asian countries : minimum norms and practices," Social Protection and Labor Policy and Technical Notes 51698, The World Bank.

    More about this item


    transition economics; economic growth; unemployment; unemployment compensation;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • P2 - Economic Systems - - Socialist Systems and Transition Economies

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