Unemployment in reforming countries: Causes, fiscal impacts and the success of transformation

Volker Treier

No 29, BERG Working Paper Series from Bamberg University, Bamberg Economic Research Group

Abstract: The paper addresses and summarizes the role of unemployment in the transformation process from an economic system with a dominant state sector to a system with a dominant private sector. After reviewing the basic facts and some of the main explanations why unemployment is high during transition in countries of Central and Eastern Europe the role of unemployment and the fiscal problems due to unemployment is discussed within a model of economies of transition. The model highlights the ambivalent role of unemployment. On the one hand unemployment could jeopardize the transformation process when it reaches a critical value but on the other hand it could be regarded as an unavoidable byproduct and even a necessary device for the success of the whole process. After presenting the main features and conclusions of the model concerning the role of unemployment, another point of view, which lets doubt about the necessity and temporariness of 'transitional unemployment', will be discussed.

Keywords: Central and Eastern Europe; transition; unemployment; restructuring; fiscal dynamics (search for similar items in EconPapers)
JEL-codes: E24 H30 H60 P20 (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bamber:29

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