Returns to Mobility in the Transition to a Market Economy

IGIER Working Paper No. 123

39 Pages Posted: 19 Jun 1998

See all articles by Tito Boeri

Tito Boeri

Bocconi University - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Christopher J. Flinn

New York University -Leonard N. Stern School of Business - Department of Economics; IZA Institute of Labor Economics

Date Written: December 1997

Abstract

In spite of ongoing dramatic changes in labor market structure, we present statistical evidence that transitional economies display rather low worker flows across sectors and occupations. Such low mobility can be explained by low returns to job changes as well as by market segmentation in the allocation of job offers. We develop an econometric model which enables us to characterize intertemporal changes in probabilities of dismissal, remuneration, and offer arrival rates on the basis of information on observed transitions and wage payments. The model is estimated using data from the Polish Labor Force Survey. Our results indicate a significant degree of segmentation in the allocation of job offers, more stability in public sector versus private sector jobs, and little, if any, rewards to tenure and age in the private sector. These findings support explanations for low mobility in transitional economies, which are based on informational failures, notably the fact that job offers do not reach those who are most prone to take up jobs and that moving from public to private enterprises is costly, especially for those with high levels of job tenure and labor market experience in the public sector.

JEL Classification: J60, J63, J64

Suggested Citation

Boeri, Tito and Flinn, Christopher J., Returns to Mobility in the Transition to a Market Economy (December 1997). IGIER Working Paper No. 123. Available at SSRN: https://ssrn.com/abstract=99468 or http://dx.doi.org/10.2139/ssrn.99468

Tito Boeri (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

IZA Institute of Labor Economics ( email )

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

Christopher J. Flinn

New York University -Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

IZA Institute of Labor Economics

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

Register to save articles to
your library

Register

Paper statistics

Downloads
71
Abstract Views
1,338
rank
322,682
PlumX Metrics