Department of Economics, University of Tübingen, Nauklerstr. 47, D-72074 Tübingen, Germany. E-mail: horst.feldmann@uni-tuebingen.de

Abstract

Over the next few years, Poland, Hungary and the Czech Republic will experience fundamental structural changes in their economies, not least because of their accession to the European Union. The economic adjustment processes that will take place in these countries require a high degree of labour market flexibility. This paper analyses whether the labour markets in Poland, Hungary and the Czech Republic are flexible enough for these processes to take place smoothly. In particular, it discusses the following areas: labour force participation, qualification and regional mobility of the labour force, wage-setting systems and statutory minimum wages, labour taxes, government regulations affecting working time and protection against dismissal, and public job-placement services. The paper reveals that there are impediments to labour market flexibility in all of these areas. It also shows that the specific rigidities vary from country to country, both in nature and in intensity.