Working Paper: CEPR ID: DP6315
Authors: Daniel Mnich; Jan Svejnar
Abstract: In this paper, we use 1991-2005 panel data on the unemployed, vacancies, inflow into unemployment, and outflow from unemployment in five former communist economies and in the western part of Germany (a benchmark western economy) to examine the evolution of unemployment together with that of inflows into unemployment and vacancies. The comparison of the transition economies with an otherwise similar and spatially close market economy is useful because it enables us to identify the main differences and similarities in the evolution of the key variables, and thus draw conclusions as to whether different or similar factors cause high unemployment.
Keywords: Communism; Labour; Transition; Unemployment
JEL Codes: C33; J4; J6; P2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high unemployment in post-communist economies (P29) | influenced by macroeconomic policies (E60) |
| high unemployment in post-communist economies (P29) | influenced by external shocks (F41) |
| high unemployment in post-communist economies (P29) | influenced by structural issues (O17) |
| differences in unemployment rates between the Czech Republic and Slovakia (J69) | attributed to timing and severity of economic downturns (F44) |
| Slovakia experiencing a deeper economic downturn (P27) | leading to higher unemployment (J65) |
| different inflow rates into unemployment across countries (J60) | contribute to observed differences in unemployment rates (J79) |
| had countries experienced West Germany's inflow rate (F55) | unemployment rates would have been more similar (F66) |
| transition economies experienced significant job-to-job mobility (J62) | complicates understanding of unemployment dynamics (J64) |