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Returns to Mobility in the Transition to a Market Economy

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Author Info
Tito Boeri
Christopher J. Flinn

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Abstract

In spite of ongoing dramatic changes in labor market structure, we present statistical evidence that transitional economies display rather low worker flows across sectors and occupations. Such low mobility can be explained by low returns to job changes as well as by market segmentation in the allocation of job offers. We develop an econometric model which enables us to characterize intertemporal changes in probabilities of dismissal, remuneration, and offer arrival rates on the basis of information on observed transitions and wage payments. The model is estimated using data from the Polish Labor Force Survey. Our results indicate a significant degree of segmentation in the allocation of job offers, more stability in public sector versus private sector jobs, and little, if any, rewards to tenure and age in the private sector. These findings support explanations for low mobility in transitional economies, which are based on informational failures, notably that fact that job offers do not reach those who are most prone to take up jobs, and that moving from public to private enterprises is costly, especially for those with high levels of job tenure and labor market experience in the public sector.

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Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 123.

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Handle: RePEc:igi:igierp:123

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  1. Lubyova, Martina & van Ours, Jan, 1997. "Unemployment dynamics and the restructuring of the Slovak unemployment benefit system," European Economic Review, Elsevier, vol. 41(3-5), pages 925-934, April. [Downloadable!] (restricted)
  2. Micklewright, John & Nagy, Gyula, 1996. "Labour market policy and the unemployed in Hungary," European Economic Review, Elsevier, vol. 40(3-5), pages 819-828, April. [Downloadable!] (restricted)
  3. Flinn, Christopher J., 1997. "Labor Market Structure and Welfare: A Comparison of Italy and the U.S," Working Papers 97-07, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
  4. Shorrocks, A F, 1978. "The Measurement of Mobility," Econometrica, Econometric Society, vol. 46(5), pages 1013-24, September. [Downloadable!] (restricted)
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  2. Jennifer Hunt, 1998. "Post-Unification Wage Growth in East Germany," William Davidson Institute Working Papers Series 304, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  3. Mal'tseva Inna, 2005. "Gender differences in occupational mobility and segregation at the labor market: The case of Russian economy," EERC Working Paper Series 05-11e, EERC Research Network, Russia and CIS. [Downloadable!]
  4. Jed Friedman, 2004. "Firm Ownership and Internal Labor Practices in a Transition Economy: An Exploration of Worker Skill Acquisition in Vietnam," William Davidson Institute Working Papers Series 2004-696, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  5. Yuri Andrienko & Sergei Guriev, 2003. "Determinants of Interregional Mobility in Russia: Evidence from Panel Data," William Davidson Institute Working Papers Series 551, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  6. Lukiyanova Anna, 2003. "Transition to Postindustrial Society? A Study of the Service Sector Employment in Russia," EERC Working Paper Series 03-09e, EERC Research Network, Russia and CIS. [Downloadable!]
  7. Sergei Guriev & Barry W. Ickes, 2000. "Microeconomic Aspects of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000," William Davidson Institute Working Papers Series 348, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  8. Randall K. Filer & Jan Hanousek, 2001. "Data Watch: Research Data from Transition Economies," William Davidson Institute Working Papers Series 416, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  9. Boeri, Tito, 2001. "Transition with Labour Supply," IZA Discussion Papers 257, Institute for the Study of Labor (IZA). [Downloadable!]
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  10. Berger, Mark C. & Earle, John S. & Sabirianova, Klara Z., 2001. "Worker Training in a Restructuring Economy: Evidence from the Russian Transition," IZA Discussion Papers 361, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. Voicu, Alexandru & Buddelmeyer, Hielke, 2003. "Children and Women's Participation Dynamics: Direct and Indirect Effects," IZA Discussion Papers 729, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Orlowski, Robert & Riphahn, Regina T., 2008. "The East German Wage Structure after Transition," IZA Discussion Papers 3861, Institute for the Study of Labor (IZA). [Downloadable!]
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  13. Klara Z. Sabirianova, 2000. "The Great Human Capital Reallocation: An Empirical Analysis of Occupational Mobility in Transitional Russia," William Davidson Institute Working Papers Series 309, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  14. Nauro F. Campos & Fabrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," William Davidson Institute Working Papers Series 470, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  15. Steven Stillman, 2000. "Labor Market Uncertainty and Private Sector Labor Supply in Russia," Working Papers 00-16, RAND Corporation Publications Department. [Downloadable!]
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  16. Viliam Druska & Byeong ju Jeong & Michal Kejak & Viatcheslav Vinogradov, 2002. "Assessing the Problem of Human Capital Mismatch in Transition Economies," William Davidson Institute Working Papers Series 467, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  17. Maciej Bukowski & Piotr Lewandowski, 2005. "Transitions from unemployment in Poland: a multinomial logit analysis," Labor and Demography 0511008, EconWPA, revised 07 Dec 2005. [Downloadable!]
  18. Carmen Pagés-Serra & Marco Stampini, 2007. "¿Sin formación no hay buenos empleos? Elementos de juicio sobre la relación entre la formación y la segmentación del mercado laboral," RES Working Papers 4562, Inter-American Development Bank, Research Department. [Downloadable!]
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