The paper examines the macroeconomic performance of 25 transition economies using a comparable data set for 1991-2000. Centrally planned economies were criticized for widespread economic inefficiency and low total factor productivity growth. In order to see whether transition to market based economy increased economic efficiency, technical progress, and total factor productivity, we estimate efficiency measures for East European, Baltic, and the other Former Soviet Union Countries using Stochastic Frontier Analysis SFA) and Data Envelopment Analysis (DEA) as a confirmatory analysis.

This paper argues that expectations are an important element that need to be included into the analysis of the effects of the minimum wage on employment. We show in a standard matching model that the observed employment effect is higher the lower is the likelihood associated to the minimum wage variation. On the other side, there is a significant anticipation effect, ignored in the literature. This property is able to explain the controversial results found in the empirical studies. When the policy is anticipated, the effect at the time of the actual variation is small and hard to identify. The model is tested on Spanish data, taking advantage of the unexpected change in the minimum wage following the election of Zapatero in 2004.

Minimum wages were first introduced in Australia and New Zealand in the late 19th century and are now in force in more than 90% of all countries.1 Despite its widespread use, the minimum wage is a debated issue. Its supporters assert that it helps prevent the excess of exploitation in the labor market and increases the living standards of the lowest paid up to some minimum acceptable standards. Detractors claim that the minimum wage may price low'skill workers out of market, harming rather than helping the poorest workers.