The Curious Case of Social Investment States, Digital Taylorism and High Female Employment in the Baltic
Sonja Avlijas, PhD Candidate,
European Institute, London School of Economics
Baltic countries have retained very high levels of female labour force participation during post-socialist transition. This trend stands in stark contrast to Central and Eastern European countries (CEECs), which, although at higher levels of economic development, have struggled to incorporate women into their labour markets. Wages, on the other hand, have lagged behind in the Baltic in comparison to the wage levels attained in CEECs. Existing literature leads us to conclude that the Baltics succeeded in achieving high female employment because of their radically neoliberal approach to transition, which was based on low provision of social benefits and high social tolerance for inequality. Using descriptive statistical analysis and process tracing, this paper offers an alternative, structuralist explanation for the observed trends. I show that Baltic countries cannot be characterised as neoliberal reformers because they allocated significant state resources to social investment policies, such as education, training and IT literacy. These policies boosted public employment, which disproportionately benefited female workers. These policies also produced significant numbers of highly skilled workers for the private service economy, which also disproportionately benefited women. The second part of my investigation answers the paradox that wages at all skill levels have remained relatively low in the Baltic, despite these countries’ substantial investment into human capital and their high educational attainment outcomes. I show that the Baltic states have not developed into knowledge economies, but have instead been locked into high skill low wage equilibria because of structural constraints imposed onto them by the forces of global capital. Transnational corporations played a significant role in shaping these outcomes, because of their global strategic shift towards digital Taylorism, which routinised and standardised high skill jobs across the world and thus fuelled a high skill low wage model of employment in emerging countries hosting foreign direct investment in the service sector, such as the Baltics.