In the employment increase of 12 million of the European Union the number of part time employees accounted for nearly 6 million between 2000 and 2006. A great number of countries try to support the distribution of part-time employment in order to raise or maintain the level of employment and to...

We extend the benchmark model of Aghion and Blanchard (1994) assuming two segments of the emerging private sector that differ in workers’ productivity. We look at the paths of employment, wages, taxes, labor costs and profits during and after the transition, up until the shock is fully...