Integration and the Well-being of Children in the Transition Economies

This paper looks at the well-being of children in transition economies in the light of greater economic integration. The different stages of integration of the transition economies into the world economy are marked by substantial variations in trade and capital flows. International labour mobility remains limited, and unemployment has been high since the beginning of transition. Because employment is the main determinant of household income, this has had a negative effect on the well-being of children. At the national level, a high degree of variation in regional unemployment rates has emerged which is symptomatic of the lack of integration of labour markets. High regional unemployment rates are further associated with increases in non-participation, while adjustments via wages and migration have been largely absent, or insufficient. Indicators of child well-being – such as infant mortality rates – are positively correlated with unemployment rates, suggesting that public service provision is, in general, not sufficient to offset the negative effect of unemployment on child well-being. A closer look at unemployment benefit schemes reveals not only large differences between countries but also scope for broader coverage and better targeting of programmes in order to reduce the risk of families falling into poverty when parents become unemployed.