Growth Resurgence, Productivity Catching-up and Labour Demand in CEECs

Peter Havlik, Sebastian Leitner and Robert Stehrer

No 3, wiiw Statistical Reports from The Vienna Institute for International Economic Studies, wiiw

Abstract: The collapse of communist regimes in Central and Eastern Europe marked a historical event for the countries on both sides of the iron curtain. Using the recently released EU KLEMS database on detailed sectoral growth and employment measures, we analyse the productivity performance in the period after 1995 for five transition economies, i.e. the Czech Republic, Hungary, Poland, the Slovak Republic and Slovenia, and compare their performance with a group of European core economies and partly Austria as a neighbouring small open economy. Our analysis reveals a strong catching-up process with the Western European economies in terms of productivity and sectoral structures. The factors driving this convergence process, however, differ across countries and industries. Apart from an analysis at the aggregate or broad sectoral performance we devote special emphasis to the detailed industry level and in particular to the manufacturing industry, which has served as the main driver in growth and productivity. We demonstrate that the Central and Eastern European countries have successfully specialized in higher-tech industries while maintaining gaps, albeit diminishing, in services. As the strong productivity catching-up was accompanied by low employment growth in the period 1995-2004 - despite high unemployment levels - we also investigate the labour market structures and the changes in patterns of employment.

Keywords: economic transition; restructuring; growth; multifactor productivity; labour demand (search for similar items in EconPapers)
JEL-codes: D24 P52 (search for similar items in EconPapers)
Pages: 71 pages including 29 Tables and 24 Figures
Date: 2008-01
New Economics Papers: this item is included in nep-eec, nep-lab and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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