Twenty five years after the fall of communism in Europe, several gaps remain in our understanding of the economic changes occurring in the period. Nowhere is this as evident as in the case of the labor market, where empirical evidence is, at best, scarce and concentrated in a handful of countries. Within this context, our analysis provides a valuable contribution by examining the life work history of 26 thousand individuals (1000 from each transition economy, except Turkmenistan) between 1989 and 2006. We find that current theories of sectoral and industrial reallocation can explain only a small part of the changes in the productive structure. Instead, our research suggests that relatively exogenous demographic changes, the entrance of young, better prepared workers and the exit of older cohorts, played a key role in the process of restructuring.

We presented and discussed the evidence during the most recent Biennial Conference of the European Association of Comparative Economic Studies (EACES) held in Budapest in September 4 to 6. A version of the presentation is available below. A working paper version will soon follow. In the meantime, all comments are welcome!