The Paradox of the Baltic States: Labour Market Flexibility but Protected Workers?

Abstract

This article assesses the strictness of employment protection legislation and its actual enforcement in the Baltic States. We use information from the applicable legislation as well as employer surveys, data on the coverage of labour legislation and the practice of law enforcement. Overall strictness is close to the average of EU countries and relatively well aligned with EU regulations; individual and collective dismissals are relatively heavily and temporary forms of employment relatively weakly regulated. However, effective flexibility is increased by problems of enforcement: there is much evidence of violations of statutory regulations at enterprise level. In addition, the proportion of the workforce actually covered by the regulations is relatively low. In the Baltic States temporary employment is more widespread, implying a higher level of flexibility than the EU average

A further investigation of unemployment persistence in European transition economies

“…An aggregate EPL index is a weighted average of the three indices. A higher index implies more protection for employees and is often associated with a more "rigid" labour market (Eamets and Masso, 2005). It follows from The union density is relatively low in the sample countries, with Slovenia and Slovakia representing the upper extreme with membership amounting to 40 percent of the labour force.…”

Wage coordination in new and old EU member states

“…For instance, in the Baltic states, actual labor force coverage of the new regulations is low, and there is clear evidence of violations at the firm level [9].…”

The Impact of Labour Regulations: Measuring the Effectiveness of Legal Norms in a Developing Country

“…Beyond the UK, this line of research is not as advanced, although Eamets and Masso (2005) have highlighted the weak enforcement of employment protection laws in Baltic countries, which they found partly attributable to poor awareness, and Cooke has reported the findings of a survey in China that found most workers and employers to be unaware of legal standards (Cooke 2005). Further, the significance of awareness-raising to improving working conditions in developing countries has attracted the attention of Fenwick et al (2007) in a study of micro and small enterprises that represents one of few attempts to consider the extent of legal awareness and its potential impact on actual working conditions in low-income economies.…”