Labour markets in transition: balancing flexibility and security in Central and Eastern Europe

Abstract

Special issue The article, based on a recent book by the two authors, attempts to give the answer to the question whether persistently high unemployment in Central and Eastern Europe is to be attributed to the rigidity of their labour markets. After defining the concept of labour market flexibility, the article discusses the incidence of flexible forms of employment in the region. The analysis shows that Central and Eastern European labour markets have increased their flexibility, but the forms of flexibility are different from those to be found in the OECD countries. Correlation of labour turnover with business cycle suggests a counter-cyclical movement of labour turnover, which is opposite to developments in the OECD countries. This is to be explained by high job, employment and income insecurity perceived by workers in transition countries contrasting with much higher confidence in the labour market and in assistance provided by labour market and social welfare institutions enjoyed by their colleagues in industrialized countries. Comparisons of the strictness of employment protection legislation in the group of selected transition countries with the EU countries indicate that on average employment protection legislation is similarly liberal/rigid as the EU average. The econometric analysis identifies significant correlation between the level of employment protection on the one hand and the employment rate and the labour market participation rate on the other but with opposite signs for the two groups of countries. While in the OECD countries stricter employment protection tends to have a negative effect on employment and labour market participation, in transition countries the results indicate that more protection could contribute towards improving employment performance and higher economic activity of people in the formal sector of the economy. All selected labour market indicators-labour market participation, employment, unemployment, youth unemployment and long-term unemploymentare positively affected by collective bargaining and active labour market policies,

A further investigation of unemployment persistence in European transition economies

“…First, it is difficult to draw any clear link between labour market institutions and unemployment persistence in the individual CEE countries. This result is in line with conclusions in, inter alia, Cazes and Nesporova (2004). Second, there appears to be a close correlation between the level of economic development and the degree of unemployment persistence.…”

“…When the transition process started in the early 1990s, it was widely perceived that unemployment would increase in the short run, but subsequently return to low levels (Cazes and Nesporova, 2004). Events subsequently contradicted this optimistic scenario.…”

“…4 The dynamic properties of the unemployment rate are arguably affected by a range of factors reflecting labour market institutions, transition processes, the economic development level and economic policy measures (Garibaldi and Brixiova, 1998;Cazes and Nesporova, 2004;Boeri and Garibaldi, 2006). To facilitate the discussion of our results, Table 1 The different regulations regarding employment protection may affect unemployment dynamics, as such regulations may affect directly the ease with which surplus labour can be dismissed, but also affect indirectly the hiring incentives of employers (OECD, 2004).…”

Graduates of Pope John Paul II State School Of Higher Education in Biala Podlaska at labor market – notions and reality

“…Efekt wycofywania z rynku pracy zamiast restrukturyzacji kwalifikacji był w Polsce szczególnie silny. Jego wystąpienie determinowały -poza czynnikami popytowymi -rozwiązania instytucjonalne (Cazes, Nesporova 2003, Grotkowska, Socha, Sztanderska 2005.…”

“…Tabela 3.20. Stopa podjęć pracy przez bezrobotnych w ciągu wyróżnionego roku (w populacji 15 i więcej lat) z gospodarkami o niższym poziomie rozwoju, w tym także niższych przywilejach socjalnych (Cazes, Nesporova 2003). Koncepcja ta polega na umożliwieniu zmian miejsca pracy, charakteru pracy, jej form, zawodu itp., stosownie do potrzeb pracodawców (elastyczność), ale bez utraty szans na zachowanie zatrudnienia (bezpieczeństwo).…”