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Worker displacement during the transition: Experience from Slovenia

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  • Peter F. Orazem
  • Milan Vodopivec
  • Ruth Wu

Abstract

The Slovenian transition created labor displacements that were bigger than those experienced in North America in the 1980s. In Slovenia, probability of both layoffs and quits fell with worker tenure, firm profitability and expected severance costs. Individuals facing a higher probability of displacement accepted slower wage growth than otherwise comparable workers. The incentives to avoid displacement were strong - workers that actually were displaced faced a slow process of transiting out of unemployment with only one-third finding re-employment. Correcting for selection, real wage losses for displaced workers are comparable to those reported for displaced workers in North America. Copyright (c) 2005 The European Bank for Reconstruction and Development.

Suggested Citation

  • Peter F. Orazem & Milan Vodopivec & Ruth Wu, 2005. "Worker displacement during the transition: Experience from Slovenia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(2), pages 311-340, April.
  • Handle: RePEc:bla:etrans:v:13:y:2005:i:2:p:311-340
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    Cited by:

    1. Hartmut Lehmann, 2014. "Worker displacement in transition economies and in China," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-20, May.
    2. Yuhao Ge & Hartmut Lehmann, 2013. "The costs of worker displacement in urban labor markets of China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    3. Lehmann, Hartmut & Muravyev, Alexander & Razzolini, Tiziano & Zaiceva, Anzelika, 2013. "The wage and non-wage costs of displacement in boom times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1184-1201.
    4. repec:wsi:wschap:9789813108448_0004 is not listed on IDEAS
    5. Rama,Martin G., 1997. "Efficient public sector downsizing," Policy Research Working Paper Series 1840, The World Bank.
    6. Y. Ge & H. Lehmann, 2013. "The Costs of Worker Displacement in Urban Labor Markets of China," Working Papers wp876, Dipartimento Scienze Economiche, Universita' di Bologna.
    7. Steven J. Matusz & David G. Tarr, 2017. "Adjusting To Trade Policy Reform," World Scientific Book Chapters,in: Trade Policies for Development and Transition, chapter 4, pages 77-114 World Scientific Publishing Co. Pte. Ltd..
    8. Milan Vodopivec & Primoz Dolenc:, 2008. "Live Longer, Work Longer: Making It Happen in the Labor Market," Financial Theory and Practice, Institute of Public Finance, vol. 32(1), pages 65-81.
    9. Lehmann, Hartmut & Pignatti, Norberto & Wadsworth, Jonathan, 2006. "The incidence and cost of job loss in the Ukrainian labor market," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 248-271, June.
    10. Darja Boršič & Alenka Kavkler, 2009. "Modeling Unemployment Duration in Slovenia using Cox Regression Models," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(1), pages 145-156, May.
    11. H. Lehmann & A. Muravyev & T. Razzolini & A. Zaiceva, 2011. "The Wage and Non-wage Costs of Displacement: Evidence from Russia," Working Papers wp734, Dipartimento Scienze Economiche, Universita' di Bologna.
    12. Lehmann, Hartmut & Muravyev, Alexander & Razzolini, Tiziano & Zaiceva, Anzelika, 2010. "The Costs of Job Loss in Russia," IZA Discussion Papers 5415, Institute for the Study of Labor (IZA).
    13. Orazem, Peter F. & Vodopivec, Milan, 1997. "Value of human capital in transition to market: Evidence from Slovenia," European Economic Review, Elsevier, vol. 41(3-5), pages 893-903, April.
    14. Darja Borsic & Alenka Kavkler, 2009. "Duration of Regional Unemployment Spells in Slovenia," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 7(2), pages 123-146.
    15. Tyrowicz, Joanna & Van der Velde, Lucas, 2017. "Labor Reallocation and Demographics," IZA Discussion Papers 11249, Institute for the Study of Labor (IZA).
    16. Appelqvist Jukka, 2007. "Wage and Earnings Losses of Displaced Workers in Finland," Discussion Papers 422, Government Institute for Economic Research Finland (VATT).
    17. Kollo'', Janos & Nagy, Gyula, 1996. "Earnings gains and losses from insured unemployment in Hungary," Labour Economics, Elsevier, vol. 3(3), pages 279-298, October.
    18. Sabine Bernab? & Marco Stampini, 2008. "Labour mobility during transition: evidence from Georgia," LICOS Discussion Papers 20608, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    19. Joanna Tyrowicz & Lucas van der Velde, 2014. "Can We Really Explain Worker Flows in Transition Economies?," Working Papers 2014-28, Faculty of Economic Sciences, University of Warsaw.

    More about this item

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • P2 - Economic Systems - - Socialist Systems and Transition Economies

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