Employment uncertainty and the incidence of job loss in transition economies: The case for Central Europe

A shared concern among Central European countries is the significant social cost imposed by market-oriented reforms. Although a growing body of litera ture has addressed the incidence of such reforms on unemployment distributi on and duration, little is known of the actual transitions of workers from employment to unemployment and specifically the dynamics of transition-indu ced job loss, This study examines such transitions in the Czech and Slovak Republics, Poland, and Slovenia within econometric models whereby voluntary and involuntary employment separations are jointly determined. In this reg ard, employment reductions triggered by demand-driven reforms are accommoda ted at the industry and the occupation level by redundancies as well as vol untary quits in anticipation of redundancy. in addition, employed workers w ithin the models consider the "costs" of job loss (likelihood of long-term unemployment) while both shirking, and thus risking dismissal, and contempl ating quitting. Estimates on personal characteristic variables in the invol untary and voluntary separation equations provide important new information on the incidence of job loss in Central European transition economies and specifically how such loss likely varies by gender, age, marital status, an d completed education. Particular attention is devoted to gender differenti als.