Unemployment and the Social Safety Net during Transitions to a Market Economy

Evidence from the Czech and Slovak Republics

John Ham, Jan Svejnar, Katherine Terrell

    Research output: Contribution to journalArticle

    Abstract

    We investigate the remarkably short unemployment spells in the Czech Republic compared to Slovakia and other Central and East European economies. We estimate hazard functions and find that 40 to 50 percent of the difference in unemployment durations between the two republics is accounted for by differences in demographics and demand conditions. The remainder is explained by differences in coefficients, proxying the behavior of firms, individuals, and institutions. In both republics the unemployment compensation system has a moderately negative effect on the exit rate from unemployment. Policy makers hence have latitude in providing adequate social safety nets without jeopardizing efficiency. (JEL C41, H53, J64, O15, P2).

    Original languageEnglish (US)
    Pages (from-to)1117-1142
    Number of pages26
    JournalAmerican Economic Review
    Volume88
    Issue number5
    StatePublished - Dec 1 1998

    Fingerprint

    Market economy
    Social safety net
    Slovak Republic
    Czech Republic
    Unemployment
    Coefficients
    Compensation system
    Exit
    Unemployment duration
    Demographics
    Politicians
    Unemployment compensation
    Hazard function

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Unemployment and the Social Safety Net during Transitions to a Market Economy : Evidence from the Czech and Slovak Republics. / Ham, John; Svejnar, Jan; Terrell, Katherine.

    In: American Economic Review, Vol. 88, No. 5, 01.12.1998, p. 1117-1142.

    Research output: Contribution to journalArticle

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