Workpackage 3
Competition-driven labour market developments, their institutional and
policy implications
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Partner responsible: IEHAS
Partners involved:
IEHAS
CESR RCEM
Objectives
The main objective is to analyse labour market responses in employment
and wage distribution to competitive pressure. As different sectors of
the economy have very different labour market characteristics, and
individual outcomes are very strongly influenced by skills, the
homogeneity assumptions, underlying a traditional macroeconomic
analysis, cannot be maintained. This calls for a disaggregate analysis
of the labour market consequences of competitive pressure. We want to
analyse the outcomes in different segments of the labour markets: the
process of job creation and destruction at the different sectors, and
for different skills, together with the wage determination. While all
transition economies experienced a very substantial upsurge of family
firms, these firms are almost exclusively consumption maximizing
enterprises, especially in rural areas. Frequently their main activity
is subsistence level farming. Competitive pressure, and the inherited
business illiteracy of the rural population seems to inhibit the entry
of profit maximizing small enterprises, which would be able to expand
the currently very low level of rural employment. Governments will have
to find an institutional solution to assist the creation of competitive
business start-ups, especially in rural areas.
Deliverables