In the 1990s - during the restructuring of large state enterprises - Central European economies experienced high unemployment. Social policy expenditures, particularly targeted to the non-employed, grew faster than expected due to the need to finance the out-of-the-labour categories. In 1992, after the Passive Labour Market Policies' reforms, the pace of transition decelerated. Unemployment dynamics, speed of transition and non-employment policies are modelled based on the assumption that the labour force is shrinking over time. Dismissed workers have the opportunity to choose an outside-option alternative to labour force participation. Individual uncertainty is assumed in a first phase of transition, while aggregate uncertainty - generating opposition to restructuring - is modelled in a second phase. The model predicts a slowdown in the speed of transition. © The European Bank for Reconstruction and Development, 2006.
Bruno, R. L., Optimal speed of transition with a shrinking labour force and under uncertainty, <<ECONOMICS OF TRANSITION>>, 2006; 14 (1): 69-100. [doi:10.1111/j.1468-0351.2006.00241.x] [https://hdl.handle.net/10807/226689]
Optimal speed of transition with a shrinking labour force and under uncertainty
Bruno, Randolph Luca
Primo
Membro del Collaboration Group
2006
Abstract
In the 1990s - during the restructuring of large state enterprises - Central European economies experienced high unemployment. Social policy expenditures, particularly targeted to the non-employed, grew faster than expected due to the need to finance the out-of-the-labour categories. In 1992, after the Passive Labour Market Policies' reforms, the pace of transition decelerated. Unemployment dynamics, speed of transition and non-employment policies are modelled based on the assumption that the labour force is shrinking over time. Dismissed workers have the opportunity to choose an outside-option alternative to labour force participation. Individual uncertainty is assumed in a first phase of transition, while aggregate uncertainty - generating opposition to restructuring - is modelled in a second phase. The model predicts a slowdown in the speed of transition. © The European Bank for Reconstruction and Development, 2006.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.