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Regional unemployment and human capital in transition economies

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  • Stepán Jurajda
  • Katherine Terrell

Abstract

Differences in regional unemployment in post-communist economies are large and persistent. We show that within-country regional variation in inherited human capital in four such economies explains the bulk of regional variation in unemployment; we explore potential explanations. Our evidence suggests that internal skill-biased migration and the flow of foreign direct investment are not working as adjustment mechanisms but rather help explain the lack of convergence in regional unemployment rates. Although this capital and labour mobility pattern is consistent with the presence of regional skill spillovers, we find little support for this hypothesis. Instead, the observed migration pattern appears to arise from different skill-specific adjustments to regional shocks brought about in part by labour-market institutions such as guaranteed welfare income. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 The European Bank for Reconstruction and Development.

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Bibliographic Info

Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.

Volume (Year): 17 (2009)
Issue (Month): 2 (04)
Pages: 241-274

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Handle: RePEc:bla:etrans:v:17:y:2009:i:2:p:241-274

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Citations

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Cited by:
  1. Enrico Marelli & Roberto Patuelli & Marcello Signorelli, 2012. "Regional unemployment in the EU before and after the global crisis," Post-Communist Economies, Taylor & Francis Journals, vol. 24(2), pages 155-175, January.
  2. Lucia Mýtna Kureková & Martin Kahanec, 2014. "Did post-enlargement labor mobility help the EU to adjust during the Great Recession? The case of Slovakia," Discussion Papers 23, Central European Labour Studies Institute (CELSI).
  3. Barbara Gebicka, 2010. "College Degree Supply and Occupational Allocation of Graduates the Case of the Czech Republic," CERGE-EI Working Papers wp407, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  4. Štěpán Jurajda & Juraj Stančík, 2013. "Organization and Firm Performance in the Czech Republic," Prague Economic Papers, University of Economics, Prague, vol. 2013(1), pages 85-110.
  5. Marian Dinga, 2011. "The Role of Investment Incentives in Regional FDI Reallocation: A Regression-Discontinuity Approach," CERGE-EI Working Papers wp438, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  6. Elizabeth Brainerd, 2010. "Human Development in Eastern Europe and the CIS Since 1990," Human Development Research Papers (2009 to present) HDRP-2010-16, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
  7. Filer, Randall K. & Münich, Daniel, 2013. "Responses of private and public schools to voucher funding," Economics of Education Review, Elsevier, vol. 34(C), pages 269-285.

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