Unemployment and the Social Safety Net During Transitions to a Market Economy: Evidence from the Czech and Slovak Republics

Posted: 13 Mar 1999

See all articles by John C. Ham

John C. Ham

National University of Singapore (NUS) - Department of Economics

Jan Svejnar

School of International and Public Affairs, Columbia University, NY, USA; CEPR; IZA; CERGE-EI; University of Ljubljana

Katherine Terrell

Stephen M. Ross School of Business at the University of Michigan; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Gerald R. Ford School of Public Policy

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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 Classification: C41, H53, J23, J64, O15, P2

Suggested Citation

Ham, John C. and Svejnar, Jan and Terrell, Katherine, Unemployment and the Social Safety Net During Transitions to a Market Economy: Evidence from the Czech and Slovak Republics. Available at SSRN: https://ssrn.com/abstract=156168

John C. Ham (Contact Author)

National University of Singapore (NUS) - Department of Economics ( email )

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Singapore 117570, Singapore 119077
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Jan Svejnar

School of International and Public Affairs, Columbia University, NY, USA ( email )

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CEPR

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IZA

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CERGE-EI

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University of Ljubljana ( email )

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Katherine Terrell

Stephen M. Ross School of Business at the University of Michigan ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

Gerald R. Ford School of Public Policy ( email )

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Ann Arbor, MI 48109
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