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Constraints to growth and job creation in low-income Commonwealth of Independent States countries

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  • Verme, Paolo

Abstract

Despite sustained output growth since 1997, low-income Commonwealth of Independent States (CIS) countries (CIS-7) have not experienced growth in employment, a phenomenon observed elsewhere in transitional economies and labeled as"jobless growth."The author addresses the causes of this phenomenon in the CIS-7. He argues that the lackof job creation is explained by a combination of structural factors, including capital-intensive growth, large potential for productivity gains among existing workers, and compartmentalized economies best depicted by a dual labor market framework. Agriculture and industry have performed asymmetrically and grown apart during the recession and during the growth periods. Agriculture provides subsistence and refuge from urban poverty and unemployment but is unable to grow beyond subsistence because it is disconnected from industrial manufacturing and because the agricultural infrastructure is depleted and underinvested. Industry has progressively lost its manufacturing capacity, and focuses on capital-intensive, highly productive sectors, and provides good wages for the few highly skilled workers. With governments and the international community currently refraining from investing in agricultural and industrial policies focused on reviving manufacturing, jobless growth is likely to persist.

Suggested Citation

  • Verme, Paolo, 2006. "Constraints to growth and job creation in low-income Commonwealth of Independent States countries," Policy Research Working Paper Series 3893, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3893
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    References listed on IDEAS

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    1. Michael Alexeev & William Pyle, 2001. "A Note on Measuring the Unofficial Economy in the Former Soviet Republics," William Davidson Institute Working Papers Series 436, William Davidson Institute at the University of Michigan.
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    Cited by:

    1. UNICEF Innocenti Research Centre. MONEE project, 2009. "Innocenti Social Monitor 2009. Child Well-being at a Crossroads: Evolving challenges in Central and Eastern Europe and the Commonwealth of Independent States," Papers insomo562, Innocenti Social Monitor.
    2. World Bank, 2011. "Challenges to Enterprise Performance in the Face of the Financial Crisis : Eastern Europe and Central Asia," World Bank Publications, The World Bank, number 2316, January.
    3. Afşin Şahin & Aysit Tansel & M. Hakan Berument, 2015. "Output–Employment Relationship Across Sectors: A Long- Versus Short-Run Perspective," Bulletin of Economic Research, Wiley Blackwell, vol. 67(3), pages 265-288, July.
    4. Verme, Paolo & Barry, Abdoul Gadiry & Guennouni, Jamal & Taamouti, Mohamed, 2014. "Labor mobility, economic shocks, and jobless growth : evidence from panel data in Morocco," Policy Research Working Paper Series 6795, The World Bank.

    More about this item

    Keywords

    Labor Markets; Economic Theory&Research; Labor Standards; Economic Growth; Achieving Shared Growth;

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