ABSTRACT
Planned economies were characterized by full employment, a tightly regulated wage structure and level, and severe constraints on labor mobility. Transition has implied a significant departure from the regime of full employment, along with progressive liberalization in wage setting. It has further implied changes not only in the locus of bargaining over wages and employment but also in the relative bargaining powers of the three main decision makers: government, managers, and workers. This chapter is an attempt to map these changes and to summarize the main common features of the transition as they relate to the labor market. The focus is on the experience in East and Central Europe and Russia, where open unemployment has already emerged and structural reforms have begun to bite. As such, these experiences offer insights for the bulk of the countries in the former Soviet Union (FSU) whose reforms have lagged.
