Labour Market Institutions and Labour Market Performance in Transition Countries

This article examines five types of labour market institutions: statutory minimum wages, working-time regulations, hiring and firing regulations, trade unions and industrial relations. It uses the results of surveys that were carried our between 1996 and 2001 among senior business executives from 12 transition countries. In these surveys the managers characterised the institutions of their respective countries. The article conducts multivariate regressions incorporating the survey results and finds that high statutory minimum wages, strict working-time regulations, tight hiring and firing regulations, powerful unions as well as confrontational industrial relations lead to higher unemployment and lower employment, mainly among the problem groups of the labour market: the low-skilled, the long-term unemployed, young people and women.