Employment in the Soviet economy has grown steadily under the impact of extensive growth. For a long time ‘extensive growth’ unconstrained by labour supply was sustained by underemployed agricultural and female labour. In the Soviet planning system labour reserves, not unlike other inputs, were essential also to prevent imbalances due to unforeseen events or planning errors. The traditional model of growth, which emerged from the theory and practice of Soviet planning, has been seriously challenged by decreasing rates of growth in the working-age population since the mid-1970s. The discussion of economic imbalances has produced different approaches to employment and labour saving. The model of normative planning which was adopted in the early 1980s has not provided a way out of stagnation. Its weakness was exposed when the issues of efficiency and quality of economic and social life were raised by the call for perestroika. The scope for radical reforms, which have been announced but not yet implemented, depends very much on the residual vitality of the traditional and still dominant model of normative planning. This model bears theoretical implications which are also important in explaining Soviet employment and wage policy.
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