Stepan Jurajda

Job Growth in Early Transition: Comparing Two Paths

Small start-up firms are the engine of job creation in early transition. We ask about differences in their growth across two different transition economies: Estonia, which experienced rapid destruction of pre-existing firms, and the Czech Republic, which reduced the old sector gradually. We find that the majority of job growth corresponds to within-industry reallocation. The within-industry growth of small start-up firms is similar in the two countries, in line with the convergence to Western industry firm-size distributions. We also find similar patterns in the evolution of wage differentials between start-ups and old firms and small differences in the extent of low-wage employment in start-ups across the two transition paths.

Regional Unemployment and Human Capital in Transition Economies

Differences in regional unemployment in post-communist economies are large and persistent. We show that inherited variation in human-capital endowment across the regions of four such economies explains the bulk of regional unemployment variation there and we explore potential explanations for this outcome through related capital and labor mobility patterns. The evidence suggests that regions with high inherited skill endowments attract skilled workers as well as FDI. This mobility pattern, which helps explain the lack of convergence in regional unemployment rates, is consistent with the presence of complementarities in skill and capital. Nevertheless, we find no supporting evidence of human capital wage spillovers implied by the complementarities story. Unemployment of the least-skilled workers appears lower in areas with a higher share of college-educated labor and future research is needed to see if this finding as well as the observed migration pattern arise from different adjustments to regional shocks by education level brought about in part by Central European labor-market institutions, such as guaranteed welfare income raising effective minimum wages.

What Drives the Speed of Job Reallocation During Episodes of Massive Adjustment

This paper uses individual-level data to characterize economy-wide job creation and destruction during periods of massive structural adjustment. We contrast the gradualist Czech and the rapid Estonian approach to the destruction of the communist economy to provide evidence on selected macroeconomic theories of reallocation with frictions. We find that gradualism (slowing down job destruction) effectively synchronizes job creation and destruction. Drastic job destruction leads to little or no slowdown of job creation. Small newly established firms are the under-researched fountainhead of jobs during the transition from communist to market oriented economies.

Foreign Ownership and Corporate Performance: The Czech Republic at EU Entry

Does foreign ownership improve corporate performance or do foreign firms merely select more productive targets for takeover? Do workers benefit from foreign acquisitions? We answer these questions based on comparing the be- fore/after change in several performance indicators of Czech firms subject to foreign takeover after 1997, i.e., after the initial waves of privatization were completed, with the corresponding performance change of matched compa- nies that remain domestically owned until 2005. We find that the impact of foreign investors on domestic acquisitions is significantly positive only in non-exporting manufacturing industries, while it is small in both services and manufacturing industries competing on international markets.

Returns to the Market: Valuing Human Capital in the Post-Transition Czech and Slovak Republics

An employer-based sample of over 660,000 Czech and 260,000 Slovak workers is used to estimate the benefits of education in 1995 to 1997. By 1997 education of all types had become substantially more highly rewarded in both countries than it was either under communism or in the early years of the transition. Education’s value began increasing earlier and reached a higher level in the Czech Republic than in Slovakia. Findings suggest that returns to unmeasured human capital or productive characteristics have also increased. Only eight years after the fall of communism, returns to human capital were on average as large or larger than in comparable, developed market economies.

Gender Gap in Admission Performance Under Competitive Pressure

Do women perform worse than equally able men in stressful competitive settings? We ask this question for competitions with a high payoff---admissions to tuition-free selective universities. With data on an entire cohort of Czech students graduating from secondary schools and applying to universities, we show that, compared to men of similar general skills and subject-of-study preferences, women do not shy away from applying to more competitive programs and perform similarly well when competition is less intense, but perform substantially worse (are less likely to be admitted) when applying to very selective universities. This comparison holds even when controlling for unobservable skills

Understanding Czech Long-Term Unemployment

One potential impact of the looming EU accession of Central European economies is unemployment hysteresis working through long-term unemployment (LTU). In this paper, we explore the mechanisms of LTU by providing a detailed description of the recent rise in Czech LTU following the recession of 1997. We place the Czech evidence in international perspective using, e.g., VAR-based simulations, and focus on the role of welfare benefits in driving LTU.

Female Managers and their Wages in Central Europe

This paper examines the gender gaps in employment and wages among top- and lower-level managerial employees in a recent sample of Czech firms. Unlike the existing analyses of managerial gender pay gaps, we acknowledge the adverse consequences of the low and uneven representation of women for the Oaxaca-Blinder decomposition and offer an alternative set of results based on a matching procedure. Only 7% of top-level Czech managers are women and their wages are about 20 percent lower even when compared only to their comparable male colleagues.

Recalls and unemployment insurance taxes

The US unemployment insurance (UI) system draws its funds from a payroll tax on employers. The tax rate varies directly with an employers layoff history. There exists extensive evidence on the effect of this so-called experience rated tax on layoff decisions. However, since firms are typically liable for each dollar of regular UI benefits paid to laid off former employees, experience rating may also affect recall behaviour. This note therefore measures the effect of the UI financing system on the duration of unemployment. This article finds some evidence that higher layoff tax costs shorten the duration of recall unemployment.

When Are 'Female' Occupations Paying More?

We compare the importance of occupational gender segregation for the gender wage gap in East and West Germany in 1995 using a sample of social-security wage records of full-time workers. East Germany, which features a somewhat higher degree of occupational segregation, has a gender wage gap on the order of one fifth of the West German gap. Segregation is not related to the West German wage gap, but in East Germany, wages of both men and women are higher in predominantly female occupations. East German female employees apparently have better observable and unobservable characteristics than their male colleagues. These findings are in contrast to a large U.S. literature, but are consistent with the imposition of high wage levels in East Germany at the outset of reforms and the selection of only high-skill women into employment. Finally, conditioning on unobservable labor quality differences using the longitudinal dimension of the data, there is a negligible impact of segregation in both parts of Germany.