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Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic

  • Sorm, Vit

    (William Davidson Institute, University of Michigan)

  • Terrell, Katherine

    (University of Michigan)

Labor mobility is crucial for an efficient allocation of resources and the transition economies are often viewed as suffering from inadequate reallocation of labor. Using quarterly micro data for the 1994-1998 period, we provide a comparative analysis of the extent and determinants of labor mobility in the Czech Republic. We show there has been significant movement into the finance, trade, and tourism sectors and out of the agricultural and industrial sectors. Over half of the people who change jobs have changed sector of employment, and this restructuring has been carried out relatively efficiently in that it occurred with lower incidence and duration of unemployment than in the other transition economies. The demographic characteristics of different patterns of mobility are similar across these transition economies: we identify younger people in general and single men as individuals who more likely to change jobs or become unemployed. The more educated are experiencing more job stability and are more likely to be hired if unemployed or out of the labor force. Finally, we find in the Czech Republic, the flows between employment and unemployment are very responsive to demand conditions. Hence, we conclude that the Czech labor market is demonstrating flexibility and efficiency in the transition.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 111.

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Length: 47 pages
Date of creation: Feb 2000
Date of revision:
Publication status: published in: Journal of Comparative Economics, 2000, 28 (2) 431-455
Handle: RePEc:iza:izadps:dp111
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  1. Ham, John C & Svejnar, Jan & Terrell, Katherine, 1998. "Unemployment and the Social Safety Net during Transitions to a Market Economy: Evidence from the Czech and Slovak Republics," American Economic Review, American Economic Association, vol. 88(5), pages 1117-42, December.
  2. Hartmut Lehmann & Jonathan Wadsworth, 2000. "Tenures that shook the world: Worker Turnover in Russia, Poland and Britain," LICOS Discussion Papers 9500, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  3. Krueger, Alan B. & Pischke, Jörn-Steffen, 1992. "A comparative analysis of East and West German labor markets before and after unification," ZEW Discussion Papers 92-11, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Petrongolo, Barbara, 1999. "Re-Employment Probabilities and Returns to Matching," CEPR Discussion Papers 2266, C.E.P.R. Discussion Papers.
  5. L Bellmann & S Estrin & H Lehmann & Jonathan Wadsworth, 1992. "The Eastern German Labour Market in Transition: Gross Flow Estimates from Panel Data," CEP Discussion Papers dp0102, Centre for Economic Performance, LSE.
  6. Swati Basu & Saul Estrin & Jan Svejnar, 2000. "Employment and Wages in Enterprises Under Communism and in Transition: Evidence from Central Europe and Russia," William Davidson Institute Working Papers Series 114, William Davidson Institute at the University of Michigan.
  7. John S. Earle, 1997. "Industrial Decline and Labor Reallocation in Romania," William Davidson Institute Working Papers Series 118, William Davidson Institute at the University of Michigan.
  8. Foley, M.C., 1997. "Labor Market Dynamics in Russia," Papers 780, Yale - Economic Growth Center.
  9. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366, March.
  10. Mark C. Foley, 1997. "Labor Market Dynamics in Russia," Working Papers 780, Economic Growth Center, Yale University.
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