Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Institutional Determinants of Labor Reallocation in Transition
Journal of Economic Perspectives
(pp. 51–76)
(Complimentary)
Abstract
The transition process differed in the countries of the Former Soviet Union (FSU) and those of Central and Eastern Europe (CEE) in terms of reallocation of labor real wage, employment and output adjustment. We sift through the theoretical and empirical literature to find an explanation for these diverging adjustment trajectories and conclude that they can be explained by the fact that the CEE countries adopted social policies that upheld wages at the bottom of the distribution forcing the old sector to restructure or collapse while the FSU countries allowed wages to free-fall not forcing the hand of the old sector.Citation
Boeri, Tito, and Katherine Terrell. 2002. "Institutional Determinants of Labor Reallocation in Transition." Journal of Economic Perspectives 16 (1): 51–76. DOI: 10.1257/0895330027111JEL Classification
- P23 Socialist Systems and Transitional Economies: Factor and Product Markets; Industry Studies; Population
- J23 Labor Demand