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Work in transition: labor market adjustment in Russia and Eastern Europe


Tsvetkova, Natalia Vasilievna (2002). Work in transition: labor market adjustment in Russia and Eastern Europe. Master's thesis / Doctoral dissertation.


Following a decade of economic reforms in post-socialist states, significant variation exists on two dimensions of labor market adjustment--change in employment and change in wages. This project finds economic explanations for this variation inadequate and examines it by analyzing the strength of interest groups at the start of transition and the structure of political institutions. A detailed case study of Russia is complemented by smaller studies of Czech and Polish labor adjustment. The case studies draw upon interviews, as well as archival and survey data. The research contributes to the transition literature by addressing the debates on the political costs of economic reforms and the nature of labor market adjustment. The main focus of the study is the origin and persistence of the high-employment low-wage outcome in Russia, including widespread wage arrears. Inflationary credits for strong employers limited alternatives to employment and depressed wages. Multiple veto players in the legislative process contributed to the spread of wage arrears. The study explains the stability of the Russian labor adjustment by the heterogeneity of labor and the absence of economic and political "voice" options. The analysis is extended to the Czech Republic and Poland. The difference in their employment and wage changes is explained by reference to the need for coalition building in the Czech parliament, and the role and position of Poland's strong trade unions. The research improves our understanding of an important set of reforms that affected millions of people through unemployment, falling wages, and wage arrears.

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Tsvetkova, Natalia Vasilievna