Employment and Economic Restructuring in the Former Soviet Union

Abstract

Massive unemployment in the former Soviet Union is inevitable as the transition to a market economy takes place. Central planning's goal of maximizing output and maintaining full employment has led to inefficient, labor-intensive production methods that are inconsistent with a competitive market. During the transition, enterprises will be forced to lay off workers, but the legacies of central planning will prevent rapid formation of new employment opportunities to absorb these workers. The prospect of civil unrest looms ahead unless government can find a way to support these workers during their unemployment.