United in diversity: Labor markets in the CEE countries

Michal Bencik

No WP 2/2021, Working and Discussion Papers from Research Department, National Bank of Slovakia

Abstract: We study supply side factors of the labor market in the Czech Republic, Hungary, Poland and Slovakia. Common economic history of these Central European economies suggests that long run relationships should have resembling patterns. While we find that while for the Czech Republic and Hungary there exists a long run relation of equilibrium unemployment rate to real wages, capital stock and terms of trade; such relationship does not hold for Poland and Slovakia. Instead labor market trends are better described by the relationship of equilibrium real wages. This finding uncovers structural differences within the Visegrad countries. These differences relate to the extent, in which labor supply can adapt to shocks. In practice this would suggest that it was more efficient for Slovakia to conduct supply driven policies, as flexible employment contracts or industrial policies, to stabilize labor market conditions. On the contrary, the more efficient tool for the Czech Republic are wage oriented demand driven policies.

JEL-codes: E24 J31 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2021-06
New Economics Papers: this item is included in nep-isf, nep-mac and nep-tra
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Related works:
Journal Article: United in Diversity. Labor Markets in the CEE Countries (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:svk:wpaper:1079

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