Formal and informal labour markets: Challenges and policy in the Central and Eastern European new EU members and candidate countries

Abstract

The paper aims at comparing the formal and informal labour markets in the Central and Eastern European new EU Member States and candidate countries of the European Union. First, the current situation of the labour market is described, focusing on the recent developments since the breaking up of the East. Then the policy design of these labour markets is depicted and its effects on formal and informal labour markets. The most important challenges for employment policy as well as the effects of enlargement on the labour markets are analysed. The paper ends with a short summary.Formal and informal labour markets; shadow economy; labour market policy; unemployment; employment; wage compensation; labour market regulation