Labour Market Behaviour in a Transition Economy: The Czech Experience

Sammanfattning: This thesis consists of four self-contained essays.Essay I presents and characterizes the fluctuations in the flows of workers in the Czech Republic in 1994-2001.The results indicate that most of the re-allocation of workers took place in the first half of the 1990s. The labour market flows in the second half of the 1990s, including the recession in 1997-98, were much smaller. Early in the 1990s, the outflow rate from unemployment to employment was much higher in the Czech Republic than in most other countries in Central and Eastern Europe. However, by the end of the 1990s, the unemployment outflow is not higher than in other countries in the region. The Czech Republic was an exception during the massive job re-allocation in the early 1990s, but it has not been able to avoid the gradual stagnation of the unemployment pool in the 1990s.Essay II provides a microperspective of the Czech labour market by using data from the Czech labour force survey. I use the panel features of the labour force survey to investigate the determinants of transitions between employment, unemployment, and non-participation. During the first half of 1990s, the Czech Republic had a relatively low inflow to unemployment and a fairly low average unemployment spell duration. However, despite the low inflow rate to unemployment, the mobility on the Czech labour market was not low. Structural changes on the labour market were, to a large extent, achieved through direct flows between different employers.Essay III studies the effects of unemployment and labour market programmes on real wages in the Czech and Slovak Republics, using district panel data for the period 1992-1998. Clear evidence of a "wage curve" exists in both countries. The estimated unemployment elasticity of pay is higher in the Slovak Republic, than in the Czech Republic, however. The wage subsidy and the public works programme exert upward pressure on real wages in Slovakia, while the evidence for the Czech Republic is more mixed.Essay IV analyses the effects of collective bargaining on wages in the Czech Republic, using data from three different sectors: textile, food processing, and construction. Three major issues are analysed: the effects of trade unions and collective bargaining on average wages, the effects of collective bargaining on wage inequality, and the effects of extensions of collective agreements to workers not covered by any collective bargaining arrangement. The results indicate that Czech trade unions are able to both raise wages for workers covered by a collective agreement and decrease the wage inequality within the covered sector. The estimated effects are stronger for women and blue-collar workers.