A comparison of labour market performance in central Asian and European republics of the former Soviet Union 1989‐1992

Notes that in most of the republics of the former USSR transition to a market economy is accompanied by a rise in unemployment and stagnation in job creation, but the degree to which these occur differs among countries. In order to compare their labour market performance, subgroups republics by gross domestic product per capita level into high, intermediate and low. Uses two indicators to characterize performance: one is an index of unemployment, which is suggested here instead of official unemployment figures. The other index is of changes in employment. Based on these, and with some exceptions, shows that during the first years of transition, 1989‐1992, the poorer republics were better off than the others on both accounts. Out of the factors suggested as possible explanations to the better performance of group III countries, three seem important: the higher rate of substitution between private and public sector employment generated by the agricultural sector; a larger labour demand elasticity, and a more moderate rate of increase in labour supply, caused by very little reduction in state sector employment.