On labor market flows during transition

Analyzing labor market flows is nowadays a standard tool of labor economics. However in case of Eastern European and Former Soviet Union countries the literature focused, due to data availability, on net flows and on short time spans (the longest being 1992-2001), which made cylicality analyses impossible. In our paper, which just appeared in Eastern European Economics we overcome these shortcomings – we use quarterly LFS data for Poland for the period 1995-2015 and focus on gross flows.

We show that, contrary to theory, flows from public sector manufacturing to private sector services, were not the dominant ones. What really changed the employment structure in transition economies were entry of young workers and exit of older ones. We also show that flows from the public sector and flows from manufacturing aren’t cyclical. However our results reveal that the trend of these flows is strongly correlated with the business cycle.

Full paper: Cichocki, Tyrowicz and van der Velde (2017), Cyclical Trend of Labor Reallocation in Poland: Transition and Structural Change, Eastern European Economics.