This study examines off-farm labor supply in the rapidly changing conditions of Bulgaria during the 1990s. In doing so, we make use of three different waves of the Bulgarian Integrated Household Survey, each reflecting remarkably different environmental conditions. The results suggest that standard theories of off-farm labor supply provide little guidance in situations characterized by chronic excess supply in the off-farm labor market and/or rapidly changing circumstances. In particular, the results show (1) that off-farm employment throughout the transition was predominantly determined by demand rather than by supply, and (2) that the magnitude and statistical significance of the various determinants are very sensitive to changing environmental conditions. As such, the results can be extremely relevant for both theory and policy for the many countries which may still need to go through privatization and painful restructuring as a result of financial crises and globalization.
Bibliographical noteNOTICE: this is the author’s version of a work that was accepted for publication in Bulgaria during transition. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Bhaumik, S, Dimova, R & Nugent, JB, 'Off-farm labour supply and labour markets in rapidly changing circumstances: Bulgaria during transition' Economic systems, vol. 35, no. 3 (2011) DOI http://dx.doi.org/10.1016/j.ecosys.2010.09.005
- off-farm labor supply
- Entitlement failures
- transition economies