ABSTRACT
The economic costs of the new open unemployment need not exceed the costs of the old repressed unemployment, however, and the implicit social welfare system can be replaced with an explicit one that includes unemployment benefits: conclusions familiar from the examination of price liberalization and inflation. The Soviet government announced the official end of unemployment in October 1930, and there was no mass open unemployment during the years of central planning. The Soviet employment realm was an amalgam of planned and market elements, and the conditions that arose from this combination have continued into the post-planning period in Russia. Soft budget constraints therefore led Soviet state-owned firms, in general, to hire more workers than a similar private firm in a market economy would have chosen to hire. A rise in measured unemployment in Russia during the transition therefore need not represent a rise in de facto unemployment.
