How Flexible are Labour Markets in the EU Accession Countries Poland, Hungary and the Czech Republic?

Abstract

Over the next few years, Poland, Hungary and the Czech Republic will experience fundamental structural changes in their economies, not least because of their accession to the European Union. The economic adjustment processes that will take place in these countries require a high degree of labour market flexibility. This paper analyses whether the labour markets in Poland, Hungary and the Czech Republic are flexible enough for these processes to take place smoothly. In particular, it discusses the following areas: labour force participation, qualification and regional mobility of the labour force, wage-setting systems and statutory minimum wages, labour taxes, government regulations affecting working time and protection against dismissal, and public job-placement services. The paper reveals that there are impediments to labour market flexibility in all of these areas. It also shows that the specific rigidities vary from country to country, both in nature and in intensity. Comparative Economic Studies (2004) 46, 272–310. doi:10.1057/palgrave.ces.8100026

Are Transition Economy Workers Underpaid?

“…Feldmann (2004) attributes the low rates of inter-regional migration in the transition countries to the legacy of central planning and its pervasive job security, to scarce housing and undeveloped housing markets, a higher share of the labor force in agriculture, low regional wage dispersion, and to the attitudes and habits of people. He suggests that "the reason for this attitude is the traditionally very close system of family ties.…”

Enhancing Income Convergence in Central Europe after EU Accession

“…Individuals who have seen the largest remuneration increase are those with high school diplomas and university degrees. This higher rate of return to education stimulates enrolment in tertiary education in Central Europe, notably in Poland and Hungary, where the share of graduates with a tertiary education has risen fast (Feldmann, 2004). By contrast, demand for tertiary education far exceeds supply in the Czech Republic, where the availability of classroom seats is limited by financial constraints (CERGE-EI, 2003).…”

“…In the central planning system, the tax system already relied on the taxation of labour income. At the start of transition, these already high labour taxes were further increased to finance welfare programmes introduced in an attempt to ease the social costs of transition (Feldmann, 2004). The shrinkage of employment caused a decline in the taxable base, making even higher tax rates necessary to maintain the financial viability of the welfare systems.…”

“…While the share of general courses in most curricula has increased, the education system of the four countries traditionally emphasises vocational training, at the expense of general education. Workers who have completed vocational training have highly specialised skills but are ill-prepared for coping with the changing demands of a market economy (Feldmann, 2004). Various policies are underway to reform the education systems and adapt them to the challenges of modern times.…”

Περιφερειακές Και Διαρθρωτικές Επιπτώσεις Της Διεύρυνσης Της Ευρωπαικής Ένωσης Στα Νέα Κράτη-Μέλη Της

“…Η προτεραιότητα στην εφαρμογή της πολιτικής των ιδιωτικοποιήσεων αιτιολογήθηκε από το υψηλό κόστος συντήρησης των (τότε) υπαρχουσών υπερχρεωμένων και προβληματικών επιχειρηματικών μονάδων και από την ανάγκη της άμεσης λειτουργίας τους με ιδιωτικοοικονομικά κριτήρια. Η 153 Ιδιαίτερα αυξήθηκε ο αριθμός των νέων και των μακροχρόνια ανέργων (Feldmann, 2004). 154 Σε αρκετές περιπτώσεις οι πραγματικοί μηνιαίοι μισθοί κατά την πρώιμη περίοδο της μετάβασης δεν ξεπερνούσαν το επίπεδο των €100 (μέγεθος μικρότερο του 50% του ελάχιστου μηνιαίου μισθού της Πορτογαλίας).…”