Institutional Determinants of Labor Reallocation in Transition | Zendy

Tito Boeri | Zendy; Katherine Terrell | Zendy

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Institutional Determinants of Labor Reallocation in Transition

Author(s) -

Tito Boeri,

Katherine Terrell

Publication year - 2002

Publication title -

the journal of economic perspectives

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 9.614

H-Index - 196

eISSN - 1944-7965

pISSN - 0895-3309

DOI - 10.1257/0895330027111

Subject(s) - restructuring , economics , forcing (mathematics) , wage , distribution (mathematics) , transition countries , soviet union , labour economics , economic restructuring , transition (genetics) , economy , international economics , political science , mathematical analysis , mathematics , finance , climatology , politics , law , geology , biochemistry , chemistry , gene

The transition process differed in the countries of the Former Soviet Union (FSU) and those of Central and Eastern Europe (CEE) in terms of reallocation of labor real wage, employment and output adjustment. We sift through the theoretical and empirical literature to find an explanation for these diverging adjustment trajectories and conclude that they can be explained by the fact that the CEE countries adopted social policies that upheld wages at the bottom of the distribution forcing the old sector to restructure or collapse while the FSU countries allowed wages to free-fall not forcing the hand of the old sector.

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