- Philippe Egoume Bossogo, Jerald Schiff, Miho Ihara, Tetsuya Konuki, and Kornelia Krajnyak
- Published Date:
- July 2006
© 2006 International Monetary Fund
Production: IMF Multimedia Services Division
Labor market performance in transition: the experience of Central and Eastern European countries / Jerald Alan Schiff … [et al.]—Washington, D.C.: International Monetary Fund 2006.
p. cm.—(Occasional paper; 248)
Includes bibliographical references.
1. Labor market—Europe, Central. 2. Labor market—Europe, Eastern.
3. Unemployment—Europe, Central. 4. Unemployment—Europe, Eastern.
5. Unemployment—Europe, Central—Statistics. I. Schiff, Jerald Alan. II. Occasional paper (International Monetary Fund); no. 248
HD5764.7. A6L32 2006
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- I Overview
- II Labor Market Developments in Transition: The Stylized Facts
- III Labor Markets in Transition: An Econometric Analysis
- IV Understanding Persistent Regional Disparities in Unemployment
- V Policy Lessons: Reducing Unemployment in Transition
- 2.1. Labor Participation Rates
- 2.2. Real GDP and Employment
- 2.3. Private Sector Share in Employment
- 2.4. Employment by Sector
- 2.5. Productivity by Sector
- 2.6. Unemployment Rates
- 2.7. Long-Term Unemployment
- 2.8. Regional Unemployment Rates
- 2.9. Real Wages
- 2.10. Statutory Overall Tax Rates on Labor Income
- 2.11. Minimum Wages
- 2.12. Statutory Replacement Ratios of Unemployment Benefits to Average Gross Wage
- 3.1. Employment Dynamics in Transition Countries: A Simple Framework
- 3.2. Sources of Growth
- 3.3. Employment and Real GDP Per Capita
- 3.4. Unemployment Residuals
- 3.5. Gross Monthly Wages and GDP per Employee, 2003
- 3.6. Strictness of Employment Protection and Size of Shadow Economy
- 4.1. Unemployment and Its Regional Dispersion
- 4.2. Unemployment and Structural Change
- 4.3. Commuting Frequency and Unemployment
- 4.4. Unemployment and Car Ownership, Hungarian Regions, 2002
- 4.5. Unemployment and Home Ownership: Selected European Nations in the 1990s
- 4.6. Unemployment and Main Phone Lines, Hungarian Regions, 2002
- A2.1. Productivity, Wages-and Unit Labor Costs in the Private Sector
- A2.2. Real Wages
- A3.1. Benefits from Labor Market Choices Under Different Transaction Costs
- A3.2. Benefits from Different Labor Market Choices Under Various Labor Market Conditions
- A3.3. Benefits from Different Labor Market Choices for Insiders and Outsiders if Privilege Is Not Portable
- A3.4. Benefits from Different Labor Market Choices for Insiders and Outsiders if Privilege Is Portable
- 2.1. Selected Macroeconomic Indicators
- 2.2. EBRD Transition Indicators
- 2.3. Bulgaria: Labor Force Survey Results
- 2.4. Croatia: Labor Force Survey Results
- 2.5. Czech Republic: Labor Force Survey Results
- 2.6. Estonia: Labor Force Survey Results
- 2.7. Hungary: Labor Force Survey Results
- 2.8. Latvia: Labor Force Survey Results
- 2.9. Lithuania: Labor Force Survey Results
- 2.10. Slovak Republic: Labor Force Survey Results
- 2.11. Slovenia: Labor Force Survey Results
- 2.12. Employment Protection Legislation Index (EPL)
- 3.1. Panel Estimation (Arellano-Bond): Employment and Unemployment
- 3.2. Impact of Terms of Trade (TOT) Shocks on the Employment Rate in the Presence of Labor Market Institutions (LMI)
- 3.3. Selected Business Environment Indicators
- 3.4. OLS Estimation on the Impact of EPL on Shadow Economy
- 4.1. Basic Indicators, Hungarian and Czech Regions
- 4.2. Indicators of Commuting Costs in Selected Countries
- 4.3. Indicators of Job Creation by Regional Unemployment Quintiles in Hungary
- 4.4. House Ownership in Selected Countries
- 4.5. Skill Endowments
- 4.6. Motivation of Austrian Outward Direct Investors-End–1999
- 4.7. Unemployment Rate and the FDI Sector’s Share in the Corporate Sector’s Employment in Hungarian Regions
- A2.1. Regional Inequalities in Hungary, 2003:Q3
The following conventions are used in this paper:
- … to indicate that data are not available or not applicable;
- — to indicate that the figure is zero or less than half the final digit shown;
- – between years or months (for example, 2004–05 or January-June) to indicate the years or months covered, including the beginning and ending years or months;
- / between years or months (for example, 2004/05) to indicate a fiscal or financial year.
“Billion” means a thousand million; “trillion” means a thousand billion.
“Basis points” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to 1/4 of 1 percentage point).
Minor discrepancies between constituent figures and totals are due to rounding.
* * *
As used in this report, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.
This Occasional Paper analyzes the labor market experiences of the countries of Central and Eastern Europe during their transition from centrally planned to market-based economies. The paper highlights remaining weaknesses in labor markets in these countries—still-high rates of unemployment and long-term unemployment in many countries, and the concentration of unemployment in selected poor regions—and suggests a broad policy road map for addressing these problems.
The paper was prepared by a team comprising Jerald Schiff, Philippe Egoumé–Bossogo, Miho Ihara, Tetsuya Konuki, and Kornélia Krajnyák. In addition, Nadia Choueiri, Paulo Drummond, and David Moore contributed valuable country case studies, which appear in Appendix II of the paper. The authors would like to thank Carlo Cottarelli, Susan Schadler, and numerous economists in the IMF’s European Department for their comments and for help with data at various stages of the process of producing this paper. Anna Unigovskaya provided excellent research assistance, and Sara Salimi and Ana Rosa Reyes ably assisted in preparing the manuscript. James McEuen of the IMF’s External Relations Department edited the manuscript and coordinated production of the publication.
The opinions expressed in this paper are solely those of the authors and do not necessarily reflect the views of the International Monetary Fund or its Executive Directors.
Active labor market policy
Central and Eastern European
Commonwealth of Independent States
European Bank for Reconstruction and Development
Employment protection legislation index
EU pre–2004: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom
Gross domestic product
Independent and identically distributed
International Labor Organization
Labor force survey
Ordinary least squares
Nomenclature of Territorial Units for Statistics (Nomenclature des Units Territoriales Statistiques)