ABSTRACT We examine the role of organized labor in the restructuring experience of two coal mining regions in the 1990's. Under similar external circumstances, the Ostrava region in the Czech Republic undertook gradual restructuring from early on whereas the Jiu Valley region in Romania went through no restructuring until 1997, followed by massive layoffs over two years. We conduct a quantitative exercise that accounts for the mine productivity, the labor market conditions, and the constraints in compensating the laid-off miners. We show that the delay in restructuring in Jiu Valley was inefficient: gradual restructuring with compensation would have benefited both the miners and the government. The proximate reason for the delay was the Jiu Valley miners' action against restructuring. We discuss what motivated their action and why it was effective
