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Self-employment and Small Workplaces in the Czech and Slovak Republics: Microeconometric Analysis of Labor Force Transitions

Author

Listed:
  • Pavla Nikolovova

    (CERGE-EI)

  • Filip Pertold

    (CERGE-EI)

  • Mario Vozar

    (CERGE-EI)

Abstract

In this paper we investigate the role of the business cycle for the transitions of Czech and Slovak workers to informal economy using Czech and Slovak Labor Force Survey data. We use two approximations for the participation in informal economy, self-employment and employment in small workplace (10 and fewer workers or 5 and fewer workers). Both statuses are potentially associated with the participation in an informal economy. Using the similar methodology as presented in Bosh and Maloney (2007), we show that recent recession caused substantial increase in transitions of workers from formal into both self-employment and employment. As compare to pre-recession time the flow into self- increased more than 4 times. The increase in transitions to small workplaces is less pronounced.

Suggested Citation

  • Pavla Nikolovova & Filip Pertold & Mario Vozar, 2014. "Self-employment and Small Workplaces in the Czech and Slovak Republics: Microeconometric Analysis of Labor Force Transitions," Proceedings of Economics and Finance Conferences 0402132, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:0402132
    as

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    References listed on IDEAS

    as
    1. Jan Hanousek & Filip Palda, 2002. "The Evolution of Tax Evasion in the Czech Republic: A Markov Chain Analysis," Public Economics 0205002, University Library of Munich, Germany.
    2. Nikopour, Hesam & Shah Habibullah, Muzafar & Schneider, Friedrich & Law, Siong Hook, 2009. "Foreign Direct Investment and Shadow Economy: A Causality Analysis Using Panel Data," MPRA Paper 14485, University Library of Munich, Germany.
    3. John Geweke & Robert C. Marshall & Gary A. Zarkin, 1986. "Exact Inference for Continuous Time Markov Chain Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(4), pages 653-669.
    4. Fougère, Denis & Kamionka, Thierry, 2005. "Econometrics of Individual Labor Market Transitions," IZA Discussion Papers 1850, Institute of Labor Economics (IZA).
    5. Bosch, Mariano & Maloney, William F., 2010. "Comparative analysis of labor market dynamics using Markov processes: An application to informality," Labour Economics, Elsevier, vol. 17(4), pages 621-631, August.
    6. Geweke, John & Marshall, Robert C & Zarkin, Gary A, 1986. "Mobility Indices in Continuous Time Markov Chains," Econometrica, Econometric Society, vol. 54(6), pages 1407-1423, November.
    7. Orviska, Marta & Caplanova, Anetta & Medved, Jozef & Hudson, John, 2006. "A cross-section approach to measuring the shadow economy," Journal of Policy Modeling, Elsevier, vol. 28(7), pages 713-724, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    informal economy; business cycle; labor force;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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