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Employment and unemployment in transition: the legacy of the communist past

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  • Jan Winiecki

Abstract

This article deals with a specific legacy, concerning the labour force, with which transition countries have been burdened while instituting systemic change. The majority of authors have concentrated on what this author calls transition cyclical unemployment, resulting from the permanent excess demand and the lack of penalty for financial failure under the communist economic system. However, another, more pernicious legacy has been the distorted skill structure in communist economies. This article explains the sources of a bias in favour of low-skilled workers in the past. In consequence, when transition began, these economies were faced with heavy excess supply of low-skilled and high demand for better skilled workers. The latter stemmed from normal requirements of economic development, that is, the need for continuous output quality improvement, technological upgrading and change in the portfolio of goods and services produced. Among the consequences of the sharp downward change in demand for low-skilled labour have been growing wage differentials and the emergence of a large pool of unemployed (and often unemployable) low-skilled labour, which may be called transition structural unemployment. In macroeconomic terms an unusually high unemployment rate was observed for about a decade following the beginning of transition.

Suggested Citation

  • Jan Winiecki, 2008. "Employment and unemployment in transition: the legacy of the communist past," Post-Communist Economies, Taylor & Francis Journals, vol. 20(3), pages 377-390.
  • Handle: RePEc:taf:pocoec:v:20:y:2008:i:3:p:377-390
    DOI: 10.1080/14631370802281480
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    References listed on IDEAS

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    1. Vladislav Flek & Jiøí Veèerník, 2005. "The Labor Market in the Czech Republic: Trends, Policies, and Attitudes (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 55(1-2), pages 5-24, January.
    2. Stefano Scarpetta & Jan J. Rutkowski, 2005. "Enhancing Job Opportunities : Eastern Europe and the Former Soviet Union," World Bank Publications - Books, The World Bank Group, number 7408.
    3. Michael Landesmann & Robert Stehrer, 2002. "The CEECs in the Enlarged Europe: Convergence Patterns, Specialization and Labour Market Implications," wiiw Research Reports 286, The Vienna Institute for International Economic Studies, wiiw.
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    Cited by:

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    2. Mondschean, Thomas & Oppenheimer, Margaret, 2011. "Regional Long-term and Short-term Unemployment and Education in Transition: The Case of Poland," The Journal of Economic Asymmetries, Elsevier, vol. 8(2), pages 23-48.

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