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Working Papers of Eesti Pank. No 7, 2002

The current paper analyses unemployment and labour movements between labour market statuses in the period of January 1997 to July 2000 using data from the Estonian Labour Force Surveys. The paper is motivated by the hypothesis that in the beginning of transition in Estonia high labour mobility and low unemployment rate seemed to be related. The analysis reveals that in the end of the 1990s labour mobility has decreased substantially in Estonia compared to 1994. The results from the paper indicate that unemployment rate and labour mobility measure have inverse relationship, both in aggregate and disaggregate level. The most mobile groups in Estonian labour market are Estonians, people living in the area of capital Tallinn and people with higher education. Young people also tend to move a lot from job to job. High mobility in case of young workers is accompanied by high number of unemployment incidents, which is captured by the aggregate unemployment rate time series.

Author's e-mail address: mroom [at] epbe.ee">mroom [at] epbe.ee

The views expressed are those of the author and do not necessarily represent the official views of Eesti Pank.

CONTENTS

Introduction

1. Main Trends in Estonian Labour Market

2. Labour Flows in Estonia

3. Modelling Labour Market Using Duration Models

3.1. Specification of the Models

3.2. Data Description and Analysis

3.3. Estimation Results

3.3.1. Model 1: Movement from Unemployment to Employment

3.3.2. Model 2: Movement from Employment to Unemployment

3.3.3. Model 3: Movement from Job to Job

3.4. Discussion of the Results

Conclusion

References:

Appendix 1. 15-69 year olds by economic activity

Appendix 2. Unemployed and inactive persons

Appendix 3. Unemployment rate in Central and Eastern European countries

Appendix 4. Unemployment rate by regional and personal characteristics

Appendix 5. Length of average unemployment spell

Appendix 6. Description of variables

Appendix 7. Sample characteristics

Appendix 8. Overview of duration models estimated on transition countries labour markets data

Unemployment and Labour Mobility in Estonia: Analysis Using Duration Models, Working Papers of Eesti Pank, No 7, 2002 (PDF*)

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