Worker-Firm Matching and Unemployment in Transition to a Market Economy: (Why) Were the Czechs More Successful than Others?
AbstractUsing panel district level data from the Czech and Slovak Republic in the 1990s, we find that the exceptionally low unemployment rate in the Czech Republic as compared to Slovakia and the other CEE economies has been brought about principally by the following phenomena in the Czech Republic: (1) a rapid increase in vacancies along with unemployment, resulting in a relatively balanced unemployment-vacancy situation at the aggregate as well as district level, (2) a major part played by vacancies and the newly unemployed in the outflow from unemployment, (3) a matching process with strongly increasing returns to scale throughout (rather than only in parts of) the transition period, and (4) ability to keep the long term unemployed at relatively low levels. Since until 1996 the Czech economy registered overall economic growth that was similar to that of the neighboring high unemployment economies (e.g., Hungary, Poland and Slovakia), the interesting question, to be addressed in future research, is whether the Czech Republic's favorable vacancy situation, coupled with its strong matching process, was brought about by a relatively high level of initial economic activity (better initial conditions) or a relatively delayed restructuring of firms.
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Bibliographic InfoPaper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 107.
Date of creation: 01 Jan 1998
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- Daniel Munich & Jan Svejnar & Katherine Terrell, 1999. "Worker-firm Matching and Unemployment in Transition to a Market Economy: (Why) Are the Czechs More Successful than Others?," CERGE-EI Working Papers wp141, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
- P2 - Economic Systems - - Socialist Systems and Transition Economies
- J4 - Labor and Demographic Economics - - Particular Labor Markets
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
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