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The persistence of job security in reforming socialist economies

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  • Milan Vodopivec

Abstract

The quest for efficiency underlies the reform efforts of the socialist economies, but job security and overemployment (redundant jobs) still characterize these economies. The author argues that reforming socialist economies have maintained job security not through planning but mainly through a complicated bargaining among coalitions that results in a massive redistribution. This redistribution amounts to a bailing out of the ailing or less productive firms and workers at the expense of the more productive firms and workers and of the household sector as a whole. The author substantiates his argument with an empirical analysis of the redistribution associated with the soft budget constraint in Yugoslavia in the 1970s and 1980s. He shows that redistribution is the outcome of a confrontation among coalitions and explains its compensatory nature.
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Suggested Citation

  • Milan Vodopivec, 1991. "The persistence of job security in reforming socialist economies," Europe-Asia Studies, Taylor & Francis Journals, vol. 43(6), pages 1011-1025.
    • Handle: RePEc:taf:ceasxx:v:43:y:1991:i:6:p:1011-1025
    DOI: 10.1080/09668139108411980
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    References listed on IDEAS

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    1. Granick,David, 1987. "Job Rights in the Soviet Union," Cambridge Books, Cambridge University Press, number 9780521332958.
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    Cited by:

    1. Gray, Cheryl W. & Stiblar, Franjo D., 1992. "The evolving legal framework for private sector activity in Slovenia," Policy Research Working Paper Series 893, The World Bank.
    2. Vodopivec, Milan & Hribar-Milic, Samo, 1993. "The Slovenian labor market in transition : issues and lessons learned," Policy Research Working Paper Series 1162, The World Bank.
    3. Vodopivec, Milan & Vroman, Wayne, 1993. "The Armenian labor market in transition : issues and options," Policy Research Working Paper Series 1193, The World Bank.

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