OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Enhancing Income Convergence in Central Europe after EU Accession

After nearly fifteen years of transition, the countries of Central Europe have entered the European Union on 1 May 2004. For the four countries that are members of the OECD (Czech Republic, Hungary, Poland and Slovak Republic), accession follows multiyear efforts of economic stabilisation and structural transformation, which have brought them large benefits. Although convergence towards higher levels of income appears to be a distant prospect at current trend growth rates, this is not a predetermined outcome. The experience of prior entrants suggests that much leeway is available within the framework of the European Union to undertake pro-growth policies. The most promising prospect in this respect appears to reside with employment creation, which has been so far lacking and led to a rather imbalanced pattern of growth. Bringing down labour taxes, easing employment protection legislation and reducing out-of-work benefits would make important contributions in this respect. While ...


Keywords: Czech Republic, Central Europe, Slovak Republic, diffusion of innovation, European Union, transition, Poland, accession, labour utilisation, economic growth, convergence, Hungary, productivity growth, catching-up
JEL: O11: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Macroeconomic Analyses of Economic Development; P31: Economic Systems / Socialist Institutions and Their Transitions / Socialist Enterprises and Their Transitions; J23: Labor and Demographic Economics / Demand and Supply of Labor / Labor Demand; J21: Labor and Demographic Economics / Demand and Supply of Labor / Labor Force and Employment, Size, and Structure; F43: International Economics / Macroeconomic Aspects of International Trade and Finance / Economic Growth of Open Economies; O52: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Economywide Country Studies: Europe
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