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Regional Unemployment in Poland: A Legacy of Central Planning

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  • Patrick Paul Walsh

Abstract

We model job reallocation and unemployment as outcomes jointly determined by the structure of inherited social capital within a two-sector Optimal Speed of Transition model. Treating regions of Poland as independent labour markets, the socio-economic inheritance of regions is found to be a legacy of planning that determines regional job reallocation rates. In turn, higher rates of (instrumented) regional job reallocation is shown to boost regional unemployment turnover, reduce the duration of frictional and increase the incidence of structural unemployment. At the regional level, the benefit system facilitates the job reallocation process and accumulates out-of-date human capital.

Suggested Citation

  • Patrick Paul Walsh, 2000. "Regional Unemployment in Poland: A Legacy of Central Planning," LICOS Discussion Papers 9100, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:9100
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp91.pdf
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    References listed on IDEAS

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    1. Boeri, Tito, 1997. "Heterogeneous workers, economic transformation and the stagnancy of transitional unemployment," European Economic Review, Elsevier, vol. 41(3-5), pages 905-914, April.
    2. Layard, R. & Nickell, S., 1991. "Unemployment in the OECD Countries," Economics Series Working Papers 99130, University of Oxford, Department of Economics.
    3. Konings, Jozef & Walsh, Patrick P, 1994. "Evidence of Efficiency Wage Payments in UK Firm Level Panel Data," Economic Journal, Royal Economic Society, vol. 104(424), pages 542-555, May.
    4. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 819-863.
    5. Boeri, Tito & Scarpetta, Stefano, 1996. "Regional mismatch and the transition to a market economy," Labour Economics, Elsevier, vol. 3(3), pages 233-254, October.
    6. Albert Ma, Ching-to & Weiss, Andrew M., 1993. "A signaling theory of unemployment," European Economic Review, Elsevier, vol. 37(1), pages 135-157, January.
    7. Zuzana Brixiova, 1997. "On the Speed of Transition in Central and Eastern Europe; Does On-the-Job Search Matter?," IMF Working Papers 97/102, International Monetary Fund.
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    Cited by:

    1. Dries, Liesbeth & Swinnen, Johan F. M., 2002. "Institutional Reform and Labor Reallocation During Transition: Theory Evidence From Polish Agriculture," World Development, Elsevier, vol. 30(3), pages 457-474, March.

    More about this item

    Keywords

    Social Capital; Job Reallocation; Regional Unemployment and Poland.;

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • L0 - Industrial Organization - - General
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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