Unemployment, Labour Market Institutions and Structural Change in Eastern Europe

Michael Burda

No 746, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper surveys the emerging labour markets of the transforming economies of Central and Eastern Europe. Pissarides's model of equilibrium unemployment highlights the dynamics of labour markets as an important factor in the transformation, and labour market institutions will determine the long-run unemployment rate. A brief survey of institutions reveals considerable cross-country variance. Using data from Czech and Slovak employment districts, a matching function is successfully estimated. The flow approach to labour markets holds normative implications for the optimal closure or restructuring of the public sector, which are derived. The optimal closure policy is a `mixed-bang' neither a `big-bang' nor benign neglect is optimal.

Keywords: Eastern Europe; Labour Markets; Matching Function; Transformation; Unemployment Benefits (search for similar items in EconPapers)
JEL-codes: J41 J65 P52 (search for similar items in EconPapers)
Date: 1992-11
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Citations: View citations in EconPapers (28)

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