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- Publisher
- American Economic Association
- Copyright
- Copyright © 2002 by the American Economic Association
- ISSN
- 0895-3309
- DOI
- 10.1257/0895330027111
- Publisher site
- See Article on Publisher Site
Abstract
Abstract 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.
Journal
Journal of Economic Perspectives – American Economic Association
Published: Jan 1, 2002