Labor Market Performance in Transition: The Experience of Central and Eastern European Countries
Occasional Papers, July 10, 2006
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Bibliographic details
- Authors: Philippe Egoume Bossogo, Jerald A Schiff, Miho Ihara, Tetsuya Konuki, Kornelia Krajnyak
- Published: July 10, 2006
- Series: Occasional Papers
- DOI: https://doi.org/10.5089/9781589064690.084
Summary
- More than a decade after the start of the transition process, unemployment rates remain in the double digits in a number of Central and Eastern European countries.
- The persistence of high unemployment, even in countries experiencing good growth, is identified as puzzling and motivates the study.
- The paper examines three interrelated questions:
- How has the transition from central planning to market economies affected labor market performance?
- How have labor market institutions and policies influenced developments?
- Why have regional differences in unemployment persisted?
Methodology
- The authors take an eclectic methodological approach that includes:
- construction of a new data set and a simple analytical model;
- econometric estimation;
- case studies.
Key Findings
- Faster-performing countries have better unemployment records.
- Labor market policies have some, but not dominant, influence over labor market outcomes.
- Policies not typically viewed as labor market policies can nevertheless significantly affect labor markets.
- Market processes cannot be relied on to eliminate regional differences in unemployment.
Policy Implications and Interpretations
- Addressing unemployment in transition economies requires attention beyond traditional labor market policies because non–labor-market policies can materially shape labor outcomes.
- Reliance solely on market adjustments is insufficient to resolve persistent regional unemployment disparities; targeted policy interventions may be necessary.
- While improving overall growth performance is associated with better unemployment outcomes, policy design matters for how growth translates into employment.
Notable Points from the Source Text
- The persistence of double-digit unemployment in several Central and Eastern European countries more than a decade into transition is a central observation that frames the analysis.
- The analysis emphasizes the role of country performance (growth) and a broader policy mix in explaining labor market outcomes and regional differences.
Source: Labor Market Performance in Transition: The Experience of Central and Eastern European Countries, by Philippe Egoume Bossogo, Jerald A Schiff, Miho Ihara, Tetsuya Konuki, Kornelia Krajnyak, July 10, 2006.