The Incidence and Cost of Job Loss in a Transition Economy: Displaced Workers in Estonia, 1989-1999

Hartmut Lehmann (), Kaia Phillips and Jonathan Wadsworth

No 209, CERT Discussion Papers from Centre for Economic Reform and Transformation, Heriot Watt University

Abstract: We examine the pattern and costs of worker displacement in one of the more reform- oriented transition countries, Estonia, as the transition process develops. Using Labour Force Survey data covering the period 1989-1999, we show that after the initial shock, displacement rates in Estonia have fallen back to levels observed in several western economies, as the economy picks up. The incidence of displacement is also similar to that in the West - concentrated on the less skilled and those with short job tenure. Roughly half of those displaced find re-employment within two months while the other half lingers on in the state of non-employment. There is less evidence however of a wage penalty to job loss, unlike in some Western countries, a fact one might attribute more to the nature of the transition process than to wage setting institutions in Estonia. The main cost of displacement is then the income loss due to non-employment, which is severe for a minority of workers who experience long-term non-employment.

Keywords: displaced workers; labour markets in transition (search for similar items in EconPapers)
JEL-codes: J64 J65 P50 (search for similar items in EconPapers)
Date: 2002
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The incidence and cost of job loss in a transition economy: displaced workers in Estonia, 1989 to 1999 (2005)
Working Paper: The Incidence and Cost of Job Loss in a Transition Economy: Displaced Workers in Estonia, 1989-1999 (2002)
Working Paper: The Incidence and Cost of Job Loss in a Transition Economy: Displaced Workers in Estonia, 1989-1999 (2002)
Working Paper: The Incidence and Cost of Job Loss in a Transition Economy: Displaced Workers in Estonia, 1989-1999 (2002)
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