Labour Market Dynamics and Worker Heterogeneity During the Great Recession Evidence from Europe

Abstract

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Labour market transitions, shocks and institutions in turbulent times: a cross-country analysis

“…In Austria, Belgium, Germany, Luxembourg and Norway the unemployment rate hardly increased during the crisis, whereas in Estonia, Greece and Spain, it rose strongly, reaching a level of 25%. Worker flows which determine the level of unemployment, exhibit substantial heterogeneity as well (Bachmann et al, 2015). For certain countries, an increase in job losses during the Great Recession led to large outflows from employment, while for others a decline in job creation led to small outflows from unemployment.…”

“…First, we extend the framework of Blanchard and Wolfers (2000) which has been extensively used to examine differences across countries in labour market stocks, especially unemployment, to an analysis of labour market transitions. Taking into account worker transitions allows us to investigate the behaviour of national labour markets over the business cycle more precisely, since flows are generally more sensitive to macroeconomic shocks and respond more quickly than it is the case for stocks, which could especially be seen in many European countries during the Great Recession (Bachmann et al, 2015). The analysis of worker flows yields insights into the mechanisms underlying the dynamic components of employment and unemployment, which is at the core of the "ins vs. outs" debate.…”

Labour market dynamics and worker heterogeneity during the Great Recession – Evidence from Europe

“…For those two countries we had to rely on the information of the turning point indicator (OECD). 7 The corresponding Markov transition matrices for individual countries are presented in Bachmann et al (2015). 9 Results obtained from estimating a multinomial logit regression for the transitions out of inactivity also provide evidence that the crisis indicator does not significantly affect the transitions from inactivity to temporary employment.…”

Labour Market Transitions and Their Determinants in Slovakia: Path from Crisis to Recovery

“…The study contributes to existing literature by providing a detailed analysis of the country about which too little is still known when it comes to labour market transitions. Although several comparative analyses in this field included Slovakia (Bachmann et al, 2015;RWI, 2014;Ward-Warmedinger and Macchiarelli, 2014), they provided limited evidence. However, Slovakia is an interesting case as it represents a country in Central Europe that has experienced a specific labour market development, characterised by a successful diminishing of the high levels of unemployment on the one hand and by persisting labour market rigidities on the other hand.…”