Unemployment Compensation in the CEE-FSU Countries
More than a full decade has now passed since the collapse of the political systems in CEE and the FSU countries. The economic transition that followed these political changes has lasted longer and has been much more difficult than was anticipated in the early 1990s. Initially, real output declined precipitously, and the pattern of recovery has varied widely in the region. As of 2001—2002, the recovery of real output to previous levels (e.g., 1989), still had not occurred in several successor states. The closing of state-owned enterprises entailed large- scale worker dislocations in all countries from this region. Economic hardship has been widespread, especially among older and younger workers, individuals with lower levels of skill, and families residing in communities once dominated by large state-owned enterprises.
The large scale of the economic dislocations experienced throughout the region was accompanied by increases in poverty and other indicators of economic hardship. These countries have also experienced important changes in basic demographic indicators. For instance, there have been large reductions in marriage and birth rates and a significant increase in the rate of emigration, particularly among the young and highly educated. For nearly all CEE-FSU countries, average life expectancy has declined, especially among men. Regional economic disparities have become more exaggerated as strong growth in the capital cities and some other urban areas stands in contrast to worsened conditions in former centers of manufacturing and in most rural areas.
High rates of unemployment, explored in the first section of this chapter, provide a clear signal of the economic distress experienced by the people of this region. High unemployment and other indicators of economic hardship highlight the need for strong income support arrangements among workers and their families. A description of UC programs and other income support programs for the unemployed is presented in the second section of the chapter. Two developments in UC programs are explored in the third section: UI benefits administra