ABSTRACT
Since 1989, East Central European governments have pursued policies to expand markets and shrink the state. According to the neo-liberal model, these policies should result in a significant re-allocation of resources into new, higher productivity uses and, in turn, economic growth. At the household level, the high levels of unemployment and collapsing real wages which have accompanied economic restructuring are expected to provoke the expected re-allocation of labour to new activities. Such changes are central to the outcome of the so-called transition process since, if markets are indeed to become the dominant economic mechanism, households as well as firms must re-allocate resources in response to emerging market signals. But the extent to which households are likely to do so has become the subject of growing debate.
