Advanced Search
MyIDEAS: Login to save this paper or follow this series

Regional Unemployment and Human Capital in Transition Economies

Contents:

Author Info

  • Jurajda, Štepán

    ()
    (CERGE-EI)

  • Terrell, Katherine

    (University of Michigan)

Abstract

Differences in regional unemployment in post-communist economies are large and persistent. We show that inherited variation in human-capital endowment across the regions of four such economies explains the bulk of regional unemployment variation there and we explore potential explanations for this outcome through related capital and labor mobility patterns. The evidence suggests that regions with high inherited skill endowments attract skilled workers as well as FDI. This mobility pattern, which helps explain the lack of convergence in regional unemployment rates, is consistent with the presence of complementarities in skill and capital. Nevertheless, we find no supporting evidence of human capital wage spillovers implied by the complementarities story. Unemployment of the least-skilled workers appears lower in areas with a higher share of college-educated labor and future research is needed to see if this finding as well as the observed migration pattern arise from different adjustments to regional shocks by education level brought about in part by Central European labor-market institutions, such as guaranteed welfare income raising effective minimum wages.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp3176.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3176.

as in new window
Length: 41 pages
Date of creation: Nov 2007
Date of revision:
Publication status: published in: Economics of Transition, 2009, 17 (2), 241–274
Handle: RePEc:iza:izadps:dp3176

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: Romania; Hungary; complementarities; labor mobility; regional labor markets; transition economies; human capital; unemployment; spillovers; Czech Republic; Ukraine;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Boeri, Tito & Brücker, Herbert, 2001. "Eastern Enlargement and EU-Labour-Markets: Perceptions, Challenges and Opportunities," IZA Discussion Papers 256, Institute for the Study of Labor (IZA).
  2. Checchi, Daniele & De Simone, Gianfranco & Faini, Riccardo, 2007. "Skilled Migration, FDI and Human Capital Investment," IZA Discussion Papers 2795, Institute for the Study of Labor (IZA).
  3. Kamil Galuscak & Daniel Munich, 2003. "Microfoundations of the Wage Inflation in the Czech Republic," Working Papers, Czech National Bank, Research Department 2003/01, Czech National Bank, Research Department.
  4. Peter Huber, 2004. "Intra-national Labour Market Adjustment in the Candidate Countries," WIFO Working Papers, WIFO 218, WIFO.
  5. Ganguli, Ina & Terrell, Katherine, 2005. "Institutions, Markets and Men's and Women's Wage Inequality: Evidence from Ukraine," IZA Discussion Papers 1724, Institute for the Study of Labor (IZA).
  6. Tito Boeri & Herbert Brücker, 2001. "Eastern Enlargement and EU Labour Markets," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(1), pages 49-68, January.
  7. Dean Jolliffe & Nauro F. Campos, 2004. "Does Market Liberalisation Reduce Gender Discrimination? Econometric Evidence from Hungary, 1986—1998," William Davidson Institute Working Papers Series 2004-678, William Davidson Institute at the University of Michigan.
  8. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, American Economic Association, vol. 93(2), pages 133-138, May.
  9. Munich, Daniel & Svejnar, Jan, 2007. "Unemployment in East and West Europe," Labour Economics, Elsevier, Elsevier, vol. 14(4), pages 681-694, August.
  10. Bevan, Alan A. & Estrin, Saul, 2004. "The determinants of foreign direct investment into European transition economies," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 775-787, December.
  11. Daron Acemoglu, 1999. "Patterns of Skill Premia," NBER Working Papers 7018, National Bureau of Economic Research, Inc.
  12. repec:iza:izadps:dp893 is not listed on IDEAS
  13. Giannetti, Mariassunta, 2003. "On the mechanics of migration decisions: skill complementarities and endogenous price differentials," Journal of Development Economics, Elsevier, Elsevier, vol. 71(2), pages 329-349, August.
  14. repec:fth:stanho:e-95-4 is not listed on IDEAS
  15. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, Elsevier, vol. 36(1), pages 117-143, August.
  16. Harald Uhlig, 2006. "Regional Labor Markets, Network Externalities and Migration: The Case of German Reunification," American Economic Review, American Economic Association, American Economic Association, vol. 96(2), pages 383-387, May.
  17. Jurajda, Stepan, 2003. "Gender wage gap and segregation in enterprises and the public sector in late transition countries," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 199-222, June.
  18. Paolo Mauro & Antonio Spilimbergo, 1998. "How Do the Skilled and the Unskilled Respond to Regional Shocks? the Case of Spain," IMF Working Papers 98/77, International Monetary Fund.
  19. Commander, Simon & Kollo, Janos, 2004. "The Changing Demand for Skills: Evidence from the Transition," IZA Discussion Papers 1073, Institute for the Study of Labor (IZA).
  20. Klara Sabirianova Peter, 2003. "Skill-Biased Transition: The Role of Markets, Institutions, and Technological Change," William Davidson Institute Working Papers Series 2003-616, William Davidson Institute at the University of Michigan.
  21. Puga, Diego, 2001. "European Regional Policies in Light of Recent Location Theories," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2767, C.E.P.R. Discussion Papers.
  22. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  23. Jan Fidrmuc, 2002. "Migration and regional adjustment to asymmetric shocks in transition economies," CPB Discussion Paper 7, CPB Netherlands Bureau for Economic Policy Analysis.
  24. Tito Boeri & Katherine Terrell, 2001. "Institutional Determinants of Labor Reallocation in Transition," William Davidson Institute Working Papers Series 384, William Davidson Institute at the University of Michigan.
  25. Bound, John & Groen, Jeffrey & Kezdi, G.Gabor & Turner, Sarah, 2004. "Trade in university training: cross-state variation in the production and stock of college-educated labor," Journal of Econometrics, Elsevier, Elsevier, vol. 121(1-2), pages 143-173.
  26. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(3), pages S111-43, June.
  27. Jesse M. Shapiro, 2006. "Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 324-335, May.
  28. Diego Puga, 1996. "The rise and fall of regional inequalities," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 20643, London School of Economics and Political Science, LSE Library.
  29. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels Across Cities," NBER Working Papers 11617, National Bureau of Economic Research, Inc.
  30. Jesse M. Shapiro, 2005. "Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital," NBER Working Papers 11615, National Bureau of Economic Research, Inc.
  31. Lucio R. Pench & Paolo Sestito & Elisabetta Frontini, 1999. "Some unpleasant arithmetics of regional unemployment in the EU. Are there any lessons for EMU?," European Economy - Economic Papers, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission 134, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  32. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 19(2), pages 316-42, April.
  33. Goohoon Kwon & Antonio Spilimbergo, 2005. "Russia's Regions," IMF Working Papers 05/185, International Monetary Fund.
  34. Jolliffe, Dean, 2002. "The Gender Wage Gap in Bulgaria: A Semiparametric Estimation of Discrimination," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 276-295, June.
  35. Moretti, Enrico, 2004. "Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data," Journal of Econometrics, Elsevier, Elsevier, vol. 121(1-2), pages 175-212.
  36. Carlo Devillanova, 2004. "Interregional migration and labor market imbalances," Journal of Population Economics, Springer, Springer, vol. 17(2), pages 229-247, 06.
  37. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, American Economic Association, vol. 94(3), pages 605-627, June.
  38. Giannetti, Mariassunta, 2002. "The effects of integration on regional disparities: Convergence, divergence or both?," European Economic Review, Elsevier, Elsevier, vol. 46(3), pages 539-567, March.
  39. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, Elsevier, vol. 22(1), pages 3-42, July.
  40. Lange, Fabian & Topel, Robert, 2006. "The Social Value of Education and Human Capital," Handbook of the Economics of Education, Elsevier, Elsevier.
  41. Fabian Bornhorst & Simon Commander, 2006. "Regional unemployment and its persistence in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 14(2), pages 269-288, 04.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. 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).
  2. Ciżkowicz, Piotr & Kowalczuk, Michał & Rzońca, Andrzej, 2014. "Heterogeneous determinants of local unemployment in Poland," MPRA Paper 56858, University Library of Munich, Germany.
  3. 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.
  4. Kahanec, Martin & Kureková, Lucia Mýtna, 2014. "Did Post-Enlargement Labor Mobility Help the EU to Adjust During the Great Recession? The Case of Slovakia," IZA Discussion Papers 8249, Institute for the Study of Labor (IZA).
  5. E. Marelli & R. Patuelli & M. Signorelli, 2011. "Regional Unemployment in the EU before and after the Global Crisis," Working Papers wp791, Dipartimento Scienze Economiche, Universita' di Bologna.
  6. Štěpán Jurajda & Juraj Stančík, 2013. "Organization and Firm Performance in the Czech Republic," Prague Economic Papers, University of Economics, Prague, University of Economics, Prague, vol. 2013(1), pages 85-110.
  7. Filer, Randall K. & Münich, Daniel, 2013. "Responses of private and public schools to voucher funding," Economics of Education Review, Elsevier, Elsevier, vol. 34(C), pages 269-285.
  8. 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.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3176. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.