chapter  6
25 Pages

Labor Supply Constraints and Responses

WithPhilip Grossman

The specter of labor shortages throughout the 1980s must be especially painful to Soviet planners because of their past heavy dependence on labor for economic growth. This chapter summarizes Soviet population trends and prospects, describes the nature and magnitude of the unfavorable manpower trends, and evaluates the policy options available to the Soviet leadership, with special attention to their implication for economic growth. In the face of declining labor force growth and little slack in participation rates, the Soviet government is likely to launch a major effort to reduce labor demand and promote labor-saving innovations throughout the economy. Population movements from farms to cities are likely to speed up nationwide by the 1980s in response to labor shortfalls in industrial areas. Targets for accelerating the improvement of labor utilization, such as reducing manual work through mechanization and increasing the capital-labor ratio, are included in the 10th five-year plan (1976–1980) plan.