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Looking for the Workforce - the Elderly, Discouraged Workers, Minorities, and Students in the Baltic Labour Markets

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  • Mihails Hazans

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Abstract

This paper looks at the evolution of the labour markets in Estonia, Latvia, and Lithuania since the beginning of transition until 2003, with a particular focus on labour force participation. Do the marked differences in labour market policies between the countries result in different patterns of participation? What are the obstacles to and driving forces of participation? We find that relative contribution of participation and demographic trends to the dynamics of the labour force varied substantially both over the years and across the three countries. Participation, in turn, has been shaped by sometimes complicated interaction between educational choices, pension reform, policy changes, and external shocks. Resulting differences in trends and patterns are quite substantial, indicating that there is a room for increasing participation in each of the countries. Panel data analysis of determinants of participation and discouragement suggests that increasing after-tax real minimum wage has significant positive effect on participation and reduces discouragement in Lithuania. In Estonia, by contrast, positive effect of minimum wage on participation is found only for teenagers of both genders and for young males. Members of ethnic minorities, especially females, in all three Baltic countries are less likely to be in the labour force, other things equal.

Suggested Citation

  • Mihails Hazans, 2005. "Looking for the Workforce - the Elderly, Discouraged Workers, Minorities, and Students in the Baltic Labour Markets," ERSA conference papers ersa05p344, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa05p344
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    References listed on IDEAS

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    1. Rutkowski, Jan, 2003. "Rapid labor reallocation with a stagnant unemployment pool : the puzzle of the labor market in Lithuania," Policy Research Working Paper Series 2946, The World Bank.
    2. Mihails Hazans, 2003. "Potential emigration of Latvian labour force after joining the EU and its impact on Latvian labour market," SSE Riga/BICEPS Research Papers 2003-2, Baltic International Centre for Economic Policy Studies (BICEPS);Stockholm School of Economics in Riga (SSE Riga).
    3. Mihails Hazans, 2003. "Determinants of Inter-Regional Migration in the Baltic Countries," ERSA conference papers ersa03p354, European Regional Science Association.
    4. Haltiwanger, John C. & Vodopivec, Milan, 2002. "Gross worker and job flows in a transition economy: an analysis of Estonia," Labour Economics, Elsevier, vol. 9(5), pages 601-630, November.
    5. Kertesi, Gabor & Köll?, János, 2003. "Fighting “Low Equilibria” by Doubling the Minimum Wage? Hungary’s Experiment," IZA Discussion Papers 970, Institute for the Study of Labor (IZA).
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    7. Huber, Peter, 2006. "Regional labor market developments in transition," Policy Research Working Paper Series 3896, The World Bank.
    8. Svejnar, Jan, 1999. "Labor markets in the transitional Central and East European economies," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 42, pages 2809-2857 Elsevier.
    9. 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.
    10. Raul Eamets, 2004. "Labour market flows and adjustment to macroeconomic shocks in the Baltic States," Post-Communist Economies, Taylor & Francis Journals, vol. 16(1), pages 47-71.
    11. Tito Boeri, 1999. "Transition with Labour Supply," William Davidson Institute Working Papers Series 274, William Davidson Institute at the University of Michigan.
    12. Hazans, Mihails, 2005. "Unemployment and the earnings structure in Latvia," Policy Research Working Paper Series 3504, The World Bank.
    13. Charles Kroncke & Kenneth Smith, 1999. "The wage effects of ethnicity in Estonia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 179-199, March.
    14. Catherine Saget, 1999. "The determinants of female labour supply in Hungary," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(3), pages 575-591, November.
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    Cited by:

    1. Mihails Hazans & Ija Trapeznikova & Olga Rastrigina, 2008. "Ethnic and parental effects on schooling outcomes before and during the transition: evidence from the Baltic countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(3), pages 719-749, July.
    2. Hazans, Mihails, 2011. "What Explains Prevalence of Informal Employment in European Countries: The Role of Labor Institutions, Governance, Immigrants, and Growth," IZA Discussion Papers 5872, Institute for the Study of Labor (IZA).
    3. Ioannidis, Yiorgos, 2013. "Η κρυφή ανεργία στην Ελλάδα / Hidden Unemployment in Greece
      [Hidden Unemployment in Greece]
      ," MPRA Paper 52120, University Library of Munich, Germany.
    4. Kenneth Smith, 2011. "Labor force participation in the Soviet and post-Soviet Baltic States," Economic Change and Restructuring, Springer, vol. 44(4), pages 335-355, November.
    5. Jaan Masso & K. Espenberg & Anu Masso & I. Mierina & Kaia Philips, 2013. "GINI Country Report: Growing Inequalities and their Impacts in the Baltic States Estonia, Latvia, Lithuania," GINI Country Reports baltics, AIAS, Amsterdam Institute for Advanced Labour Studies.

    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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