February 2006

IZA DP No. 1961: Nonstandard Forms and Measures of Employment and Unemployment in Transition: A Comparative Study of Estonia, Romania, and Russia

published in: Comparative Economic Studies, 2006, 48 (3), 435-457

Studies of transition economy labor markets have typically relied on standard, publicly available employment and unemployment statistics. This paper analyzes microdata on detailed labor force survey responses in Russia, Romania, and Estonia to measure nonstandard, boundary forms and alternative definitions of labor force status. Our estimates show that measured employment and unemployment rates are quite sensitive to definition, particularly in the treatment of household production (subsistence agriculture), unpaid family helpers, and discouraged workers; while the categories of part-time work and other forms of marginal attachment are still relatively unimportant. We find that tweaking the official definitions can produce alternative employment rates that are sharply higher in Russia but much lower in Romania and slightly lower in Estonia, and alternative unemployment rates that are sharply higher in Romania and moderately higher in Estonia and Russia.