Worker Displacement During the Transition: Experience from Slovenia

30 Pages Posted: 31 Mar 2005

See all articles by Peter F. Orazem

Peter F. Orazem

Iowa State University and IZA; IZA Institute of Labor Economics

Milan Vodopivec

World Bank - Human Development Network; IZA Institute of Labor Economics

Ruth Wu

Federal Reserve Banks

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Abstract

The Slovenian transition created labor displacements that were bigger than those experienced in North America in the 1980s. In Slovenia, probability of both layoffs and quits fell with worker tenure, firm profitability and expected severance costs. Individuals facing a higher probability of displacement accepted slower wage growth than otherwise comparable workers. The incentives to avoid displacement were strong - workers that actually were displaced faced a slow process of transiting out of unemployment with only one-third finding re-employment. Correcting for selection, real wage losses for displaced workers are comparable to those reported for displaced workers in North America.

Suggested Citation

Orazem, Peter Francis and Vodopivec, Milan and Wu, Ruth, Worker Displacement During the Transition: Experience from Slovenia. Economics of Transition, Vol. 13, No. 2, pp. 311-340, 2005. Available at SSRN: https://ssrn.com/abstract=696246

Peter Francis Orazem (Contact Author)

Iowa State University and IZA ( email )

260 Heady Hall
Ames, IA 50011
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515-294-8656/515-294-7740 (Phone)
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IZA Institute of Labor Economics

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Germany

Milan Vodopivec

World Bank - Human Development Network ( email )

1818 H Street, NW
Washington, DC 20433
United States

IZA Institute of Labor Economics

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

Ruth Wu

Federal Reserve Banks

Washington, DC
United States

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