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Understanding Czech Long-Term Unemployment

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  • Stepan Jurajda
  • Daniel M??nich

Abstract

One potential impact of the looming EU accession of Central European economies is unemployment hysteresis working through long-term unemployment (LTU). In this paper, we explore the mechanisms of LTU by providing a detailed description of the recent rise in Czech LTU following the recession of 1997. We place the Czech evidence in international perspective using, e.g., VAR-based simulations, and focus on the role of welfare benefits in driving LTU.

Suggested Citation

  • Stepan Jurajda & Daniel M??nich, 2002. "Understanding Czech Long-Term Unemployment," William Davidson Institute Working Papers Series 498, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2002-498
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/39883/3/wp498.pdf
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    References listed on IDEAS

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    1. Marek GÕra & Christoph M. Schmidt, 1998. "Long-term unemployment, unemployment benefits and social assistance: The Polish experience," Empirical Economics, Springer, vol. 23(1/2), pages 55-85.
    2. Micklewright, John & Klugman, Jeni & Redmond, Gerry, 2002. "Poverty in the Transition: Social Expenditures and the Working-Age Poor," CEPR Discussion Papers 3389, C.E.P.R. Discussion Papers.
    3. Machin, Stephen & Manning, Alan, 1999. "The causes and consequences of longterm unemployment in Europe," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 47, pages 3085-3139, Elsevier.
    4. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
    5. 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 1117-1142, December.
    6. Jurajda, Stepan, 2002. "Estimating the effect of unemployment insurance compensation on the labor market histories of displaced workers," Journal of Econometrics, Elsevier, vol. 108(2), pages 227-252, June.
    7. Christopher A. Pissarides, 1992. "Loss of Skill During Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(4), pages 1371-1391.
    8. David Card & Philip K. Robins, 1996. "Do Financial Incentives Encourage Welfare Recipients to Work? Evidence from a Randomized Evaluation of the Self-Sufficiency Project," NBER Working Papers 5701, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Pablo de Pedraza, 2008. "Labour Market Matching Efficiency In The Czech Republic Transition," William Davidson Institute Working Papers Series wp920, William Davidson Institute at the University of Michigan.
    2. Kamil Galuscak & Jan Pavel, 2007. "Unemployment and Inactivity Traps in the Czech Republic: Incentive Effects of Policies," Working Papers 2007/9, Czech National Bank.
    3. Kamil Galuscak & Jan Pavel, 2012. "Taxes and Benefits: Work Incentive Effects of Policies," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 62(1), pages 27-43, February.
    4. Michal Franta, 2008. "Time Aggregation Bias in Discrete Time Models of Aggregate Duration Data," Working Papers 2008/10, Czech National Bank.

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    Keywords

    Unemployment; Transition; Flexibility; Czech Republic;
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