Exploring Labour Market Dynamics and Unemployment Trends in OECD Countries of Centraland Eastern Europe (2011-2022)

Purpose: The article shows the differences between the countries studied in terms of the unemployment rates and the flow rates between employment and unemployment, as well as the determinants affecting both variables. The subject of the analysis is the phenomenon of unemployment in the OECD countries of Central and Eastern Europe for 2011-2022, considered from both the stock and flow sides. Design/Methodology/Approach: The analyses should show in which countries the unemployment rates were the lowest and highest and in which countries the rates of people flows were the lowest, implying a stagnant nature of unemployment, and in which people flows were the highest, indicating dynamic nature of unemployment. The analysis should also indicate the role of determinants such as GDP dynamics, investment rates, type of employment contracts, the restrictiveness of employment protection legislation, and the scope of active labour market policy in shaping unemployment rates and flow indicators. The research undertaken in this article is based on annual data on labour markets in the OECD countries from Central and Eastern Europe in 2011-2022. The analyses show that the countries' labour markets differed in unemployment rates and indicators of the intensity of people's flows between employment and unemployment. The lowest unemployment rates occurred in the Czech Republic and Slovenia, while Slovakia, Latvia, and Lithuania recorded the highest unemployment rates. In turn, the indicators of the flows of people on the labour market were the highest in Estonia and the lowest in Slovakia. This means that in Estonia, the unemployment stock was the most dynamic, implying relatively short duration periods of unemployment, while in Slovakia, it was the most stagnant, characterized by relatively long periods of unemployment. Findings: The econometric analyses indicated the importance of several factors determining unemployment rates and the dynamics of flows between unemployment and employment in the studied countries. The following turned out to be essential determinants in reducing unemployment rates: an increase in the share of temporary employment, an increase in investments in the economy, an increase in the share of people with higher education and more restrictive provisions of employment protection legislation. Moreover, the factors that significantly influenced the increase in the dynamics of flows of people in the labour market were: the increase in the share of temporary employment, the increase in the share of part-time employment and the increase in investments in the economy. The study shows that in order to reduce unemployment, it is necessary to invest more, develop temporary employment, raise the level of education of the labor force and create legal provisions that protect employment more strongly. However, the more dynamic nature of unemployment requires increasing investments, developing temporary employment and increasing the percentage of people with higher education. Practical Implications: The results of the research have important practical significance for the state's economic policy. They indicate the directions of actions that should be taken in the state's economic policy in order to reduce the size of unemployment and create its more dynamic character. Originality/Value: The originality of the study lies in the fact that unemployment is analyzed not only in terms of its size, but also in terms of its stagnant or dynamic nature. Moreover, the factors determining the size and nature of unemployment include not only typical economic variables (GDP, investments), but also institutional factors (EPL indices, type of employment contract, in particular temporary employment).