A new approach to the Pridnestrovian labour market

Abstract

The development and application of the Summers’ efficiency-wage model (1988) applied over the Pridnestrovian labour market highlighted the job unitability in the region after the enforcement of the free trade agreement between the EU and Moldova, in July 2016, that did not include Pridnestrovie. Because of the current situation, the Pridnestrovian macroeconomic variables, as well as the whole govern-mental policies, have moved towards the stabilization and to guarantee job safeness and competitiveness. Nevertheless, results show the impact on the short-run and the application of the Summers’ model shows differences among risk sources of the labour market. For this project the model will be followed to some extent and new concepts will be included, such as: the calculation of its parameters or the introduction of the b-value. Therefore, there is an opportunity to achieve competitive economies of scale by promoting those ones with lower rates of b-value.