Labour Markets and the Applied Microeconomics of Transition

The purpose of this course is to provide East European economists with further education in the microeconomic analysis of the restructuring process in transitional economies, with a special emphasis on labor market adjustment. Currently, there is great interest on the part of policymakers throughout the region and international organizations on the design of policies both to facilitate and to cushion the effects of restructuring, yet rather little research has addressed the behavioral and social implications of alternative strategies. The course would provide a forum to share the methodologies and findings developed by the CEU Economics Department and Labor Project, which has become a center for research and data collection in this area, and to develop a wider network of faculty and scholars cooperating on the investigation of these topics. Curriculum

While the bulk of the economic literature on transition is highly descriptive, a significant theoretical literature has also developed. Both the theoretical and the applied literatures are rather scattered and seldom analyzed as a coherent whole, however. The course will seek to provide an overview of the various approaches to theoretical models that have been used in the analysis of microeconomic problems in the transition and to attempt to discover new approaches. A chief aim will be to develop ways of bringing together well-defined theoretical propositions with econometric tools and appropriate microdata sets for testing them. The theory classes will emphasize institutional economics and models of mobility, incentives, and information, and they will cover all of the principal theoretical articles on the microeconomic problems of transition. Topics will include privatization, competition, labor market transitions, restructuring, soft budget constraints, incentives in organizations, and institutional change. Seminars will be held where significant papers from the literature and ongoing research will be discussed, and participants will be encouraged to report on their own research and on their experiences in teaching courses in the microeconomics of transition. By contrast with earlier years, the course will not attempt to provide a complete introduction to labor econometrics. Rather, the econometric techniques will be discussed as they arise in the consideration of certain issues and papers. Resource Persons

The lectures will be given and seminars led by economists both from Eastern Europe and former Soviet Union and from Western universities. Economists from the Stockholm Institute of Transition Economics will participate in all parts of the course.