Can we really explain worker flows in transition economies?
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The document investigates worker flows in transition economies, utilizing data from the Life in Transition Survey. It highlights the significance of demographic factors in understanding these flows and posits that traditional theories focusing solely on public to private movement are inadequate. The findings suggest that individual characteristics and unemployment rates play a crucial role in the transitions experienced in these economies.
Can we really explain worker flows in transition economies?
- 1. Can we really explain worker ows in transition economies? Can we really explain worker ows in transition economies? Evidence from the Life in Transition Survey Joanna Tyrowicz Lucas van der Velde GRAPE Group for Research in APplied Economics September 4th, 2014, EACES Biennal Conference in Budapest
- 2. Can we really explain worker ows in transition economies? Table of contents 1 Introduction 2 Theories of reallocation 3 Hypotheses 4 Data and methods 5 Results 6 Conclusions
- 3. Can we really explain worker ows in transition economies? Introduction Introduction Motivation Analyses of transition economies highly selective - few countries, few periods Theories on transition focus on worker ow from public to private de novo - no treatment of manufacturing) services and demographics Theories of sectoral reallocation disregard transition processes Our goal: to understand better worker ows in transition economies Advantage: new, comprehensive retrospective data: Life in Transition Survey (EBRD)
- 4. Can we really explain worker ows in transition economies? Theories of reallocation Aghion & Blanchard (1994) - optimal speed of transition Inecient (public sector) jobs collapse State can subsidize
- 5. rms (postpone collapse) or redundant workers (with safety nets) Taxes raised to
- 6. nance this make creating jobs costly, desynchronizing JD JC ) Simple link between U, JC and pace of privatization, state can alleviate social costs of transition by choosing the adequate pace of job destruction in the public sector Limits Simpli
- 7. cations concerning the role of sectoral reallocation Workers homogenous: no demographics or changes in education - inconsistent with empirical evidence Jurajda and Terrell (2003); Schaner (2011); Turunen (2004)
- 8. Can we really explain worker ows in transition economies? Theories of reallocation Caballero Hammour (several papers) Main concept: appropriability Endogenous job creation and destruction based on capital speci
- 9. city and incomplete contracts. ) Used to explain reallocation and technological change in advanced economies. Limits No treatment of public sector / taxes / subsidies Workers homogenous: no demographics or changes in education - inconsistent with empirical evidence Jurajda and Terrell (2003); Schaner (2011); Turunen (2004)
- 10. Can we really explain worker ows in transition economies? Theories of reallocation Common limitations in applying these theories to the data Data limitations on controlling for gross and net ows The dierent role of worker ows (reallocations) vs job ows (privatizations) Privatized vs new (de novo)
- 11. rms { all private equal? What if a worker holds more than a one job during the transition period? Which transition do we capture?
- 12. Can we really explain worker ows in transition economies? Hypotheses Our statements to be tested 1 Flows are generally not AB or CH 2 Demographics explains most of the reallocation 3 AB explains unemployment better than CH in transition countries, but they both poorly explain employment 4 Channels of mediation suggested by AB and CH do not seem to be driving the processes, demographics do
- 13. Can we really explain worker ows in transition economies? Data and methods Data sources Life in transition Survey - 27 transition countries, 18 years Homogeneous survey compiled by the EBRD in 2006 and 2010. Life history in the
- 14. rst of them ) re ect aggregate data fairly well Limitations: missing variables, identi
- 15. cation of ows. Other sources ILO Stat and Fondazione: Wages and EPL EBRD: Transition measures. World Bank: GDP per capita. Penn tables: Labour share in GDP, Employment to population ratio.
- 16. Can we really explain worker ows in transition economies? Data and methods Overall labor market trends Figure : Changes in the labor market composition .4 .45 .5 .55 .6 .65 Female 1990 1995 2000 2005 30 35 40 45 Age 1990 1995 2000 2005 .1 .2 .3 .4 .5 .6 High Ed. 1990 1995 2000 2005 0 .2 .4 .6 .8 Private 1990 1995 2000 2005
- 17. Can we really explain worker ows in transition economies? Results De
- 18. nitions AB: public ) private sector (within the same industry) CH: manufacturing ) services (within the same sector) ABCH: public manufacturing ) private services NONE: private service ) public manufacturing SAME: within sector and industry EXIT: To retirement ENTRY: Into employment
- 19. Can we really explain worker ows in transition economies? Results H1: which ows dominate? How much the models explain? Figure : Relative importance of dierent ows 0 .2 .4 .6 .8 1 LVA HUN RUS EST CZE KAZ BGR ROM UKR LTU POL SVN UZB HRV BLR SVK SRB MDA ALB KGZ MNE BIH MKD GEO TJK ARM AZE AB CH SAME ABCH NONE To retirement From school
- 20. Can we really explain worker ows in transition economies? Results One speed of transition? + job-to-job ows dominate! Figure : Evolution of dierent ows 0 2 4 6 1990 1995 2000 2005 AB CH ABCH SAME NONE
- 21. Can we really explain worker ows in transition economies? Results H2: which ows explain employment? Table : Movements to employment N) E U) E E) E AB 0.968*** 0.868*** 0.917*** CH 0.649*** 0.662*** 0.594*** ABCH -0.623*** -0.592*** -0.531*** Same industry - Manufacturing 0.102*** 0.348*** 0.479*** Same sector - Public 0.883*** 0.882*** 0.916*** Same Sector - de novo 0.854*** 0.892*** Reincidence of unemployment -0.207*** -0.004*** Personal characteristics Yes Yes Yes Country dummies Yes Yes Yes Year dummies Yes Yes Yes Number of id 15,131 9,968 13,107 R2 between 0.825 0.276 0.641 R2 within 0.834 0.314 0.641
- 22. Can we really explain worker ows in transition economies? Results H3: which ows explain unemployment (better)? Table : Link between unemployment rates and ows AB CH SAME ABCH NONE EXIT ENTRY ow2 0.057*** 0.089 0.009 0.220* 0.026 0.006 0.037* ow -0.789*** -0.688 -0.533*** -1.067** -0.595* -0.060 -0.762*** N 486 486 486 486 486 486 486 R2 0.888 0.885 0.890 0.886 0.886 0.885 0.889
- 23. Can we really explain worker ows in transition economies? Results H4: do the channels of mediation work? Table : Durations models VARIABLES TOTAL CH AB (de novo) Unemployment rate 8.850*** 9.035*** 8.435*** Unemployment rate 2 -12.305*** -18.396*** -16.145*** Entry 3.727*** 8.737*** 6.219*** Exit 2.950 0.676 7.472** ULC dynamics -0.062 0.878 -0.601 Public 0.472*** 0.346** 2.917*** De novo 0.049 -0.001 0.486 Manufacturing 0.455*** 0.190 0.522*** Construction 0.457*** 0.190 0.834*** Services 0.527*** -0.283* 0.756*** High skill jobs -0.340*** -0.210 -0.143 Personal characteristics Yes Yes Yes AIC 39362.182 6618.8377 8937.4545 BIC 39517.767 6774.4224 9093.0392 Notes: Estimates from a proportional hazard Cox model with country speci
- 24. c baseline hazard ratios.
- 25. Can we really explain worker ows in transition economies? Conclusions Summarizing 1 The focus on AB and CH movements is not enough in transition economies. 2 Demographic ows were of great signi
- 26. cance and should be considered in further analysis 3 Individual characteristics played an important role: winners and losers of transition. 4 Unemployment rates have an impact on ows, but the transmission mechanisms should be reconsidered What is next?: Corroborate our
- 27. ndings with national data sources. Deepen the analysis of the role of institutions on labor market transitions. Develop an integrated ABCH model of transitions.
- 28. Can we really explain worker ows in transition economies? Conclusions Questions or suggestions? Thank you for your attention
- 29. Can we really explain worker ows in transition economies? Conclusions Jurajda, S., Terrell, K., 2003. Job growth in early transition: Comparing two paths. Economics of Transition 11 (2), 291{320. Schaner, S., 2011. Heterogeneity in the cyclical sensitivity of job-to-job ows. Zeitschrift fur ArbeitsmarktForschung 43 (4), 263{275. Turunen, J., 2004. Leaving state sector employment in russia. Economics of Transition 12 (1), 129{152.