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Optimal Speed of Transition 10 Years After

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  • Tito Boeri

Abstract

The adjustment of labour markets during transition has been quite different from that anticipated by the Optimal Speed of Transition (OST) literature.In particular, it has involved stagnant unemployment pools, large flows to inactivity and strikingly low workers' mobility especially when account is made of the changes occurring in the structure of employment by sector, occupation and ownership of firms. Furthermore the policy trade-offs embedded in the OST literature relate mainly to the alternative between a big-bang strategy and a gradual transition process. This amounts to assuming that governments can control the pace of closure of state enterprises. However, the facts discussed in this paper suggest that separations from state sector employment were, ultimately, an endogenous variable rather than a policy instrument, as they were to a large extent the byproduct of voluntary choices of workers.

Suggested Citation

  • Tito Boeri, "undated". "Optimal Speed of Transition 10 Years After," Working Papers 154, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    • Handle: RePEc:igi:igierp:154
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    References listed on IDEAS

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    1. M. Dewatripont & G. Roland, 1992. "Economic Reform and Dynamic Political Constraints," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 703-730.
    2. Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition in Central Europe," NBER Chapters, in: NBER Macroeconomics Annual 1994, Volume 9, pages 283-330, National Bureau of Economic Research, Inc.
    3. Rodrik Dani, 1995. "The Dynamics of Political Suppport for Reform in Economies in Transition," Journal of the Japanese and International Economies, Elsevier, vol. 9(4), pages 403-425, December.
    4. McAuley, Alastair, 1991. "The Economic Transition in Eastern Europe: Employment, Income Distribution, and the Social Security Net," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 7(4), pages 93-105, Winter.
    5. Burda, Michael C, 1992. "Unemployment, Labour Market Institutions and Structural Change in Eastern Europe," CEPR Discussion Papers 746, C.E.P.R. Discussion Papers.
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    Cited by:

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    2. Wladimir Andreff, 2004. "Would a Second Transition Stage Prolong the Initial Period of Post-socialist Economic Transformation into Market Capitalism?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(1), pages 7-31, June.
    3. Tyrowicz, Joanna & van der Velde, Lucas, 2018. "Labor reallocation and demographics," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 381-412.
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    5. Maxim Bouev, 2004. "Diverging Paths: Transition in the Presence of the Informal Sector," William Davidson Institute Working Papers Series 2004-689, William Davidson Institute at the University of Michigan.
    6. Harry Papapanagos & Peter Sanfey, 2003. "Emigration and the Optimal Speed of Transition," Review of International Economics, Wiley Blackwell, vol. 11(3), pages 541-554, August.
    7. Maxim Bouev, 2001. "Labor Supply, Informal Economy and Russian Transition," William Davidson Institute Working Papers Series 408, William Davidson Institute at the University of Michigan.
    8. Iva Tomic & Joanna Tyrowicz, 2010. "What Happened to the Middle Class in the New Market Economies? The Case of Croatia and Poland," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 12(1), pages 9-44, April.
    9. Joanna Tyrowicz & Lucas van der Velde, 2014. "Can We Really Explain Worker Flows in Transition Economies?," Working Papers 2014-28, Faculty of Economic Sciences, University of Warsaw.
    10. Randolph Luca Bruno, 2003. "Speed of Transition, Unemployment Dynamics and Nonemployment Policies: Evidence from the Visegrad Countries," LEM Papers Series 2003/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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    More about this item

    JEL classification:

    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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