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Economic Restructuring, Unemployment, and Growth in a Transition Economy
Author:
Ms. Kornelia Krajnyak
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,
Mr. Bankim Chadha
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Fabrizio Coricelli null

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Series:
IMF Working Papers
Volume/Issue:
Volume 1993: Issue 016
Language:
English
Publication Date:
01 Mar 1993
DOI:
https://doi.org/10.5089/9781451843323.001
ISBN:
9781451843323
ISSN:
1018-5941
Pages:
49
Keywords:
WP; private sector employment; employment decision; UH curve; employment in the private sector; private sector wage; private sector good; private sector activity; Public sector; Employment; Unemployment; Human capital; Unemployment rate; Central and Eastern Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper develops a model of the process of reallocation of labor from the state sector to the private sector. When growth is exogenously determined, we show that in the initial stages of transition unemployment will rise over time. After a critical stage in the transition process, restructuring is accompanied by a decline in unemployment. When growth is endogenously determined, and human capital is acquired by learning-by-doing, we show that whether restructuring eventually occurs is determined by the level of human capital in the private sector and the rate of unemployment. The effects of various shocks and government policies in affecting the costs, speed, and eventual outcome of restructuring are analyzed.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund