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Regional Unemployment and its Persistence in Transition Countries

Author

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  • Bornhorst, Fabian

    (European University Institute)

  • Commander, Simon

    (IE Business School, Altura Partners)

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.

Suggested Citation

  • Bornhorst, Fabian & Commander, Simon, 2004. "Regional Unemployment and its Persistence in Transition Countries," IZA Discussion Papers 1074, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1074
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    References listed on IDEAS

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    1. Commander, Simon & Yemtsov, Ruslan, 1995. "Russian unemployment : its magnitude, characteristics, and regional dimensions," Policy Research Working Paper Series 1426, The World Bank.
    2. Guriev, Sergei & Andrienko, Yuri, 2003. "Determinants of Interregional Mobility in Russia: Evidence from Panel Data," CEPR Discussion Papers 3835, C.E.P.R. Discussion Papers.
    3. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
    4. Simon Commander & Mark Schankerman, 1997. "Enterprise restructuring and social benefits," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(1), pages 1-24, May.
    5. 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.
    6. Vera Gács & Peter Huber, 2005. "Quantity adjustments in the regional labour markets of EU candidate countries," Papers in Regional Science, Wiley Blackwell, vol. 84(4), pages 553-574, November.
    7. Peter Huber, 2003. "Quantity Adjustments in Candidate Countries Regional Labour Markets," ERSA conference papers ersa03p239, European Regional Science Association.
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    More about this item

    Keywords

    mobility; regional unemployment; transition;
    All these keywords.

    JEL classification:

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

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