Structural Adjustment Without Mass Unemployment?: Lessons from Russia

Mass unemployment has usually been seen as a necessary accompaniment to major structural adjustment, yet in Russia, amid economic collapse, enormous structural changes have taken place with remarkably low levels of unemployment. Some have seen low unemployment as a sign that Russia has undergone no real changes, but others see it as a sign of a remarkably flexible labor market, with very high rates of labor turnover and extremes of wage differentiation allowing low-wage (and even no-wage) employment to persist in the old industries alongside the growth of a new private sector. On this interpretation, Russia shows to the world, in extreme form, both the benefits and the costs of labor market flexibility. Drawing on the latest Russian and Western research, the contributors consider the debates surrounding the retarded levels of official unemployment and question why these levels remain so low. They offer theoretical and empirical critiques of orthodox Western interpretations of the Russian labor market and discuss labor market flexibility, proposing that increased flexibility has resulted in a downgrading of skills in the industrial labor force. This phenomenon, they argue, has particularly affected women who, as a result, have now become marginalized in the labor market. In the detailed empirical evidence they conclude that official statistics ignore the fact that both the employed and unemployed are active and adaptable in their search for new forms of employment and, as a consequence, will respond to more active and effective policy interventions. In view of this the contributors raise questions about appropriate industrial and labor market policies for all transitional economies. Structural Adjustment without Mass Unemployment? will be welcomed by students, researchers and academics working in the fields of labor and industrial economics and the economics of transition.