Central and East European Labour Markets in Transition: Developments, Causes, and Cures

The main questions addressed in this paper are: First, how did labour markets in the Visegrad countries react to the breakdown of a command economy and the transformation to a market economy? Second, which way ahead is likely, or to put it differently, what should be done now to improve conditions in the labour market in these countries? A comprehensive survey of labour market developments in each country under consideration is offered at some length. Special emphasis is then put on the dynamics of employment and unemployment in order to identify key issues for the sources of the malfunctioning of these labour markets. The paper then looks at the wage formation process including institutional settings and income policies, active and passive labour market policies, and the structure of employment and output.