relative size of the services sector and a simultaneous decrease in the size of the industry (manufacturing) sector. That is what has indeed happened, although the patterns vary across sub-regions. In European transition economies the service sector has expanded at the expense of the agriculture sector and to somewhat lesser extent at the expense of the manufacturing sector.<sup>4</sup> In Belarus, Russia and Ukraine the services sector has expanded largely at the expense of the manufacturing sector, while the fall in the share of the agricultural sector was less pronounced. In other CIS the direction of structural change has been different. In contrast to European transition economies, the share of agriculture has significantly increased in virtually all lowincome CIS countries. As elsewhere, the manufacturing sector has diminished, however the service sector has hardly expanded.

Estonia provides perhaps the most dramatic example of the change in the employment structure. The market services sector expanded by 14 percentage points from 1990 through 2002, while agriculture and manufacturing contracted by 14 and 5 percentage points, respectively. In Poland changes were less dramatic but more typical of European transition economies. Market services as a share of total employment went up by 7 percentage points, whereas agriculture dropped by 5 percentage points and manufacturing by 4 percentage points (from 1994 through 2002). In Russia de-industrialization was more pronounced, as the share of manufacturing decreased by as much as 12 percentage points, however market services expanded at a slower pace, their share increasing by mere 2 percentage points (from 1990 through 1999). The example of Azerbaijan is quite typical of the low-income CIS. The share of agriculture increased by some 4 percentage points (form 1990 through 2002). So, did the share of market services, which went up by 5 percentage points. At the same time, the share of manufacturing dropped dramatically by 13 percentage points.<sup>5</sup> Transition economies differ substantially as regards the sectoral structure of employment. In CEE the economy is dominated in equal measure by manufacturing and market services (jointly about 60 percent of all jobs). Public services (health, education, administration, etc.) provide additional 25 percent of jobs. The share of agriculture is relatively small (15 percent). Outliers in this group are Bulgaria and Romania, where the share of agriculture is well above the average for the group. If the group is limited to current EU member transition economies, then the share of agriculture is correspondingly lower, and that of manufacturing is higher.

In Belarus, Russia and Ukraine relatively more jobs are provided by agriculture and public services at the cost of significantly smaller market services sector. Belarus, Russia and Ukraine apparently move towards similar sectoral employment structure as CEE, however the pace of structural changes is slower and thus the economic structure seems “less advanced”.

In the other CIS countries the employment structure looks dramatically different. It is heavily dominated by agriculture, which accounts for close to half of total employment. The manufacturing sector tends to be small, providing on average less than 15 percent of all jobs. The market services sector is also substantially smaller than in other ECA sub-regions, accounting for less than 20 percent of all jobs. Only the share of public services (which is the least varying component of the employment structure) is comparable to that in other ECA transition economies.

> 4   This does not necessarily imply that labor has moved directly from agriculture to services.  An alternative scenario is also possible that agricultural labor moved to manufacturing and manufacturing labor moved to services. Data which would allow one to discriminate between those two scenarios is absent.

> 5  These figures come from an employer based survey, and thus probably underestimate the growth in the employment share of the services and agriculture sectors.

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