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Discussion Paper Details

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Title: Unemployment, Labour Market Institutions and Structural Change in Eastern Europe

Author(s): Michael C Burda

Publication Date: November 1992

Keyword(s): Eastern Europe, Labour Markets, Matching Function, Transformation and Unemployment Benefits

Programme Area(s): Human Resources and International Macroeconomics

Abstract: This paper surveys the emerging labour markets of the transforming economies of Central and Eastern Europe. Pissarides's model of equilibrium unemployment highlights the dynamics of labour markets as an important factor in the transformation, and labour market institutions will determine the long-run unemployment rate. A brief survey of institutions reveals considerable cross-country variance. Using data from Czech and Slovak employment districts, a matching function is successfully estimated. The flow approach to labour markets holds normative implications for the optimal closure or restructuring of the public sector, which are derived. The optimal closure policy is a `mixed-bang' neither a `big-bang' nor benign neglect is optimal.

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Bibliographic Reference

Burda, M. 1992. 'Unemployment, Labour Market Institutions and Structural Change in Eastern Europe'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=746