Transition and unemployment in Central Europe: How redundant workers fare in regional labor markets

Research paper by Henry W. Herzog Jr.

Indexed on: 01 Jan '03Published on: 01 Jan '03Published in: Papers in regional science : the journal of the Regional Science Association International


This study analyses whether redundant workers are stigmatized in regional labor markets, and if so, examines the severity of the effects. Stigmatization, possibly an outcome of statistical discrimination, is assumed to obtain whenever likelihoods of long-term unemployment are systematically elevated among otherwise equivalent individuals, due to involuntary job-loss. Such effects are considered during early transition in the Czech Republic, Slovak Republic and Poland, and within a modeling framework whereby current search duration (likelihood of long-term unemployment) and benefit receipt are jointly-determined. Although econometric estimates of long-term unemployment indicate significant and persistent stigmatization within the Slovak Republic and Poland; underlying causation apparently differs between countries.