Structural Change and Unemployment in Central and Eastern Europe: Some Key Issues

Labour markets in Central and Eastern Europe (CEE) will be a key vehicle for the expression and reallocation of skills and talents in the transformation process. To a large extent, the emergence of unemployment is an indicator of this restructuring and reallocation. This paper surveys some of the issues involved in the rise of CEE unemployment as well as the policy options available for dealing with it. Specifically, the paper looks at reallocation of human resources across industries, occupations, space, and labour market states. The matching function is proposed as one possible device for summarizing and studying these developments. The paper briefly evaluates current labour market policies in the CEE economies in this light.