Regional Unemployment and its Persistence in Transition Countries

27 Pages Posted: 20 Apr 2004

See all articles by Fabian Bornhorst

Fabian Bornhorst

International Monetary Fund (IMF)

Simon John Commander

London Business School; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2004

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.

Keywords: transition, regional unemployment, mobility

JEL Classification: J61, P2

Suggested Citation

Bornhorst, Fabian and Commander, Simon John, Regional Unemployment and its Persistence in Transition Countries (March 2004). IZA Discussion Paper No. 1074. Available at SSRN: https://ssrn.com/abstract=525902

Fabian Bornhorst

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Simon John Commander (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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