Published originally on 20 October 2010

The ETF publishes a new report on 20 years of transition in six post-Soviet courtiers with a special focus on education and employment. The report is based on a ‘Black Sea Labour Market Review’, project implemented in Belarus, Ukraine, Republic of Moldova, Georgia, Armenia and Azerbaijan. We talk to Ummuhan Bardak, ETF expert, coordinator and one of the authors of the report.

ETF: The title of the new ETF report on labour markets in six post soviet countries is somewhat modest because the document covers two decades and an impressive range of issues from political changes to economic policies, to migration and to labour market and education. Is it at all possible to summarise the findings?

Ummuhan Bardak: Indeed, the new report is result of a very comprehensive work, which resulted in six separate country reports and a comparative regional study. First of all, the report shows that these six countries went through huge changes. And of course, the change is not bad or good in itself, but we need to recognise that it is always difficult. Any policy-maker needs to keep this in mind - these changes were enormous and the hardship was enormous, too. Changes on this scale would be a immense challenge for any country, whether highly developed or not.

Did you find out anything new that surprised you during the research?

Frankly, I was surprised by the diversity of these countries. They are often called post-Soviet, transition economies, but they are so different. In fact, they were different from the beginning, from the very start of the transition. Ukraine had big industry, Azerbaijan had oil, the Republic of Moldova had agriculture, etc. And then they had different conditions as the years passed - just one extreme example: countries in southern Caucasus experienced armed conflicts. Governments from Belarus to Georgia made different policy choices, based on national preferences or other factors.

In general, it is a grim picture that you paint in the report - declining populations, continuing poverty, rising inequalities, limited jobs, migration, corruption, relatively low human development levels due to low GDP per capita. It seems that the transition have not produced yet the expected results. There is only one exception: education. It is one of the few areas that bring hope.

It is true that education and human capital are still a positive element. Around the world, similar countries in terms of GDP per capita, have much lower education achievements. So, high literacy rates and education attainment levels seem to be a good legacy of the Soviet system. There is also revival of vocational education and training.

People are literate and they value education, but does it actually pay to be educated in these countries?

On the macro level, it is very difficult to find evidence that better education leads to better economic performance in a particular country. One thing is having well educated citizens; another is whether the economy is able to use them. And we actually think that our eastern partners’ economies are underutilising their human capital. So skills that people acquire during their long education are not used later or used to lesser extent. People work in jobs that do not require their high quality skills. Still, the authors of the study think that even if underused, better education has positive impact in these economies.

Everywhere young people leaving school face a difficult transition to work. Is it different in the six countries analysed in the report?

Not much different. But here, on this micro level, education plays a crucial role. There is no doubt that if you attain a higher level of education, you will have better chances to find a job. This is positive thing. And unfortunately this is not always a straight-forward situation in other contexts. In countries of southern Mediterranean, for example, it is mostly opposite: when you stay at school longer, you have a higher probability of facing unemployment.

The findings of this report are extremely interesting, but are you making any practical recommendations as to how to tackle the problems, which you identified?

As I said the study was wide-ranging and covered very different countries. It would be difficult to give a one-fits-all recommendation. Nevertheless, we are identifying certain key issues that need to be addressed.

What are these issues?

First, it is the urgent need for job creation. It’s clear for us that these jobs will have to be created in the private sector and that governments should enact policies that make it easier to do business and employ people. Second, it is employment policies that often seem to be just a dead letter, mere rhetoric. The resources for passive [e.g. unemployment benefits] and active [e.g. training or job seeking advice] employment measures must be better used in a more targeted manner. The organisation, resources, skills of public institutions need improvement. Then social partners, especially employers’ organisations, should be better involved in policy making, and the legislation should create a good balance between security and flexibility. The third issue is migration, which, if well managed, can bring benefits (flow of remittances, less pressure for jobs), but it can also lead to brain drain back home and brain waste of the migrants who can’t use their skills abroad.

What about education?

Yes, this is the final issue we raised: the human capital stocks and how to maintain its high levels of flows. There are some worrying trends. In all countries, there is lack of proper public funding for education. We registered rising dropout rates in some countries, and there are problems with access to schools, for example in rural areas. There are also signs that the quality and LM relevance of education need considerable improvements. Finally, as these countries will soon be ageing, there is a critical, not yet addressed need for training for adults.

And to whose attention would you like to draw these important issues?

We would like to reach policy makers and politicians. And not only in these six countries but also in the EU and beyond, in all institutions that cooperate with our six eastern partners on economic and social development. To make the report more digestible for less technical readers, we published a short report that selects and summarises the findings. In addition, the ETF plans to disseminate the findings and promote debate about them during a series of conferences with an official launch in Odessa on 20-21 October 2010.

Find out more:

Report - short version
Background on the Odessa Conference