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Labor Market Flexibility in Central and East Europe

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  • Jan Svejnar

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Abstract

I explore the extent to which insufficient labor market flexibility is an important factor causing Central and East European (CEE) economies to perform worse than they could and hence slowing down their readiness to enter the European Union. My conclusion is that labor market flexibility is an issue but that it is not a major factor in comparison to imperfections and regulations in other areas such as the housing market, transportation infrastructure, capital market, corporate governance, legal framework, and business environment. In particular, my assessment is that transition labor markets have been as flexible and functional as labor markets in the market economies and that the observed differences across transitional labor markets do not account for cross-country differences in economic performance.

Suggested Citation

  • Jan Svejnar, 2002. "Labor Market Flexibility in Central and East Europe," William Davidson Institute Working Papers Series 496, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2002-496
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/39881/3/wp496.pdf
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    References listed on IDEAS

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    1. Swati Basu & Saul Estrin & Jan Svejnar, 2000. "Employment and Wages in Enterprises Under Communism and in Transition: Evidence From Central Europe and Russia," William Davidson Institute Working Papers Series 440, William Davidson Institute at the University of Michigan.
    2. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter.
    3. Simon Commander & Andrei Tolstopiatenko & Ruslan Yemtsov, 1999. "Channels of redistribution: Inequality and poverty in the Russian transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 411-447, July.
    4. Ham, John C & Svejnar, Jan & Terrell, Katherine, 1998. "Unemployment and the Social Safety Net during Transitions to a Market Economy: Evidence from the Czech and Slovak Republics," American Economic Review, American Economic Association, vol. 88(5), pages 1117-1142, December.
    5. Klara Z. Sabirianova, 2000. "The Great Human Capital Reallocation: An Empirical Analysis of Occupational Mobility in Transitional Russia," William Davidson Institute Working Papers Series 309, William Davidson Institute at the University of Michigan.
    6. Garner, Thesia I & Terrell, Katherine, 1998. "A Gini Decomposition Analysis of Inequality in the Czech and Slovak Republics during the Transition," CEPR Discussion Papers 1897, C.E.P.R. Discussion Papers.
    7. Jan Svejnar, 1996. "Pensions in the Former Soviet Bloc: Problems and Solutions," William Davidson Institute Working Papers Series 14, William Davidson Institute at the University of Michigan.
    8. Swati Basu & Saul Estrin & Jan Svejnar, 1997. "Employment and wage behaviour of industrial enterprises in transition economies: The cases of Poland and Czechoslovakia1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(2), pages 271-287, November.
    9. Stepan Jurajda & Katherine Terrell, 2000. "Optimal Speed of Transition: Micro Evidence from the Czech Republic," William Davidson Institute Working Papers Series 355, William Davidson Institute at the University of Michigan.
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    Citations

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    Cited by:

    1. Anna Maria Ferragina & Francesco Pastore, 2008. "Mind The Gap: Unemployment In The New Eu Regions," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 73-113, February.
    2. repec:jes:journl:y:2017:v:8:p:29-43 is not listed on IDEAS
    3. Maria Lissowska, 2010. "Evolution of the Institutions Governing the Labour Market. The Case of Poland," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, December.
    4. John Giles & Albert Park & Fang Cai, 2003. "How has Economic Restructuring Affected China???s Urban Workers?," William Davidson Institute Working Papers Series 2003-628, William Davidson Institute at the University of Michigan.
    5. Bah, El-hadj & Brada, Josef C. & Yigit, Taner, 2011. "With a little help from our friends: The effect of USAID assistance on SME growth in a transition economy," Journal of Comparative Economics, Elsevier, vol. 39(2), pages 205-220, June.
    6. Vladimir Gligorov & Anna Iara & Michael Landesmann & Robert Stehrer & Hermine Vidovic, 2008. "Western Balkan Countries: Adjustment Capacity to External Shocks, with a Focus on Labour Markets," wiiw Research Reports 352, The Vienna Institute for International Economic Studies, wiiw.
    7. repec:sgh:gosnar:y:2007:i:10:p:1-20 is not listed on IDEAS
    8. Kaarel Kilvits & Alari Purju, 2005. "Structure of Public Governance Institutions and Their Impact on Delocalisation of Labour-Intensive Industries," Working Papers 130, Tallinn School of Economics and Business Administration, Tallinn University of Technology.

    More about this item

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • P2 - Economic Systems - - Socialist Systems and Transition Economies
    • P3 - Economic Systems - - Socialist Institutions and Their Transitions

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