DP2263 | A Comparative Look at Labour Mobility in the Czech Republic : Where Have All the Workers Gone?

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In this paper we provide a comparative analysis of the extent and determinants of labour mobility in the Czech Republic during 1994-1998. Our analysis is motivated by the fact that labour mobility is crucial for an efficient allocation of resources and the transition economies are often viewed as suffering from inadequate reallocation of labour. We find the Czech labour market has shown a great deal of flexibility. There has been significant movement into the newly created finance, trade and tourism sectors and considerable outflows from the agricultural and industrial sectors. Over half of the people who change jobs have changed sector of employment. Although flows out of employment are small relative to other transition countries, there is a high degree of turnover in the pool of unemployed and job-to-job flows are relatively high (except compared to Russia). These flows are very responsive to demand conditions. The younger and more educated are the ones experiencing the most mobility and the more positive directions of mobility. The existing problems of inadequate restructuring appear to have their origins outside the labour market.