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Regional unemployment and its persistence in transition countries

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  • Fabian Bornhorst
  • Simon Commander

Abstract

We look at the differences in regional unemployment rates in six major transition countries and their persistence over time. We analyse the role various adjustment mechanisms play. While movement out of the labour force seems to be one consequence in many regions with high relative unemployment, there are also signs of emerging wage flexibility. Employment creation, by contrast, has not picked up in regions of high unemployment. Labour mobility also remains very limited in size although it appears to respond to basic economic incentives. Policies addressing housing market imperfections and information asymmetries are necessary to increase worker mobility and to integrate better national labour markets. Copyright (c) The European Bank for Reconstruction and Development, 2006.

Suggested Citation

  • Fabian Bornhorst & Simon Commander, 2006. "Regional unemployment and its persistence in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(2), pages 269-288, April.
  • Handle: RePEc:bla:etrans:v:14:y:2006:i:2:p:269-288
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    References listed on IDEAS

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    1. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
    2. Commander, Simon & Yemtsov, Ruslan, 1995. "Russian unemployment : its magnitude, characteristics, and regional dimensions," Policy Research Working Paper Series 1426, The World Bank.
    3. Andrienko, Yuri & Guriev, Sergei, 2003. "Determinants of Interregional Mobility in Russia: Evidence from Panel Data," CEPR Discussion Papers 3835, C.E.P.R. Discussion Papers.
    4. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
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    More about this item

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • P2 - Economic Systems - - Socialist Systems and Transition Economies

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