Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2001:1: Unemployment, Labour Market Programmes and Wage Determination: Evidence from the Czech and Slovak Republics

Henrik Huitfeldt ()
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Henrik Huitfeldt: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper studies effects of unemployment and labour market programmes on real wages in the Czech and Slovak Republics using district paneldata for the period 1992-1998. Clear evidence of a "wage curve" exists in both countries. The estimated unemployment elasticity of pay is, however, higher in the Slovak Republic, than in the Czech Republic. The wage subsidy and the public works programme exert upward pressure on real wages in Slovakia. When accounting for effects from adjacent districts, a positive significant effect of labour market programmes is also estimated for the Czech Republic.

Keywords: Wage determination; Unemployment; Labour market programmes

JEL-codes: J31; J68; P39

32 pages, January 8, 2001

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